PwC Warns Nigeria’s New Crypto Tax Rules Could Raise Compliance Costs

• PwC says unresolved issues around wallet transfers, asset valuation and withholding tax could complicate compliance.

• VASPs face extensive reporting and tax-administration duties, with penalties reaching N10 million for the first month of default.

• The firm says clearer guidance is needed to prevent over-taxation and avoid discouraging investment and innovation.

• Nigeria’s new framework for taxing virtual assets could increase compliance costs for taxpayers and Virtual Asset Service Providers (VASPs), according to PwC Nigeria.

August 18, () — The professional services firm said the guidelines issued by the Nigeria Revenue Service (NRS) provide greater clarity on the taxation of digital assets but leave important legal and practical questions unresolved.

PwC raised the concerns in its tax alert, “Taxing the intangible: A critical analysis of the NRS guidelines on taxation of virtual assets,” following the NRS issuance of Information Circular No. 2026/21 on July 31, 2026.

Wallet Transfers and Valuation

One of the major concerns relates to transfers between wallets owned by the same person.

The guidelines provide that transfers between wallets belonging to the same individual do not constitute a taxable disposal. However, PwC noted that the relief does not appear to extend to companies or partnerships.

This could create uncertainty for businesses that move virtual assets between multiple wallets they own, particularly where the transfers are part of ordinary treasury or operational activities.

PwC also flagged uncertainty over how virtual assets should be valued for tax purposes.

The guidelines require prices to be obtained from an aggregator approved by the NRS. However, the Service has yet to publish a list of approved aggregators.

This could leave taxpayers and VASPs uncertain about which pricing sources should be used when calculating the value of assets for tax reporting.

The issue is particularly important in a market where cryptocurrency prices can vary across exchanges and platforms.

VASPs Face Higher Compliance Burden

PwC also highlighted the interaction between withholding tax and income tax.

Under the guidelines, VASPs are required to withhold one per cent of gross disposal proceeds on specified virtual asset transactions, while income tax applies to gains arising from disposal.

The firm warned that the two mechanisms would need to be carefully reconciled to prevent taxpayers from being effectively over-taxed.

“The interaction between the WHT on gross proceeds and the income tax on net gains will require careful reconciliation on annual returns to avoid over-taxation,” PwC stated.

The guidelines also impose extensive responsibilities on VASPs, including withholding tax, stamp duty collection, Tax Identification Number requirements, filing of returns and maintenance of transaction records.

Failure to comply attracts a N10 million penalty for the first month of default and N1 million for every subsequent month.

PwC questioned whether imposing such extensive tax-administration duties on VASPs is appropriate when comparable responsibilities are not similarly imposed on other financial-market intermediaries.

The firm also questioned the legal basis for some withholding tax obligations imposed on VASPs outside the Withholding Tax Regulations 2024.

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What It Means for Crypto Investors

The new framework represents Nigeria’s effort to bring a rapidly expanding virtual-asset market further into the formal tax system.

While greater clarity could improve compliance and government revenue collection, PwC’s concerns highlight the risk that unresolved rules could increase the cost of operating in the sector.

For investors, the immediate priority will be maintaining detailed records of acquisitions, disposals and transfers.

For VASPs, the burden is potentially broader, requiring stronger systems for transaction monitoring, tax deductions, reporting and record-keeping.

The emerging debate is therefore no longer simply about whether cryptocurrency should be taxed, but about how Nigeria can enforce the tax without making compliance unnecessarily expensive or discouraging legitimate digital-asset activity.

Further clarification from the NRS on valuation, corporate wallet transfers and withholding tax could determine how smoothly the new framework works in practice.