PwC Warns of Tax Risks as Nigeria Tightens Rules on Virtual Assets

By Benson Daniel

PricewaterhouseCoopers has warned investors and businesses dealing in virtual assets to pay close attention to Nigeria’s new tax rules, as the country moves towards a more comprehensive framework for taxing cryptocurrency and other digital assets.

The warning comes as the Federal Government strengthens regulation of the virtual asset market and seeks to bring digital transactions more firmly within the country’s tax system.

Under the Nigeria Tax Act, which took effect on January 1, 2026, profits and gains arising from the disposal of virtual assets are subject to tax. The law covers a broad range of digital assets, including cryptocurrencies, utility tokens, security tokens and non fungible tokens.

PwC said the new regime creates several areas that taxpayers and virtual asset service providers must carefully consider, particularly around how gains are calculated, where an asset is deemed to be located and how transactions involving non monetary consideration are treated.

One of the major issues is the valuation of virtual assets. Where a digital asset is disposed of, its market value is generally determined by the price it could reasonably fetch in an arm’s length transaction or open market.

This could create compliance challenges for investors who conduct transactions on different platforms or hold assets whose values fluctuate significantly within short periods.

Another area requiring attention is the treatment of non monetary transactions. Where a virtual asset is exchanged for something other than cash, the value of the asset at the date of disposal is used for determining the taxable gain.

The rules also address the location of digital assets for tax purposes. A virtual asset may be regarded as located in Nigeria where the person with direct or indirect beneficial ownership, control or interest in the asset is resident in Nigeria or has a Nigerian permanent establishment to which the asset is connected.

The new framework means that simply holding or transacting in digital assets through foreign platforms may not automatically remove a Nigerian resident’s tax obligations.

PwC has also highlighted the need for proper record keeping as the new system takes effect. Investors and businesses may need to maintain accurate records of acquisition costs, disposal values, transaction dates and other information required to establish their taxable positions.

For companies operating virtual asset businesses, the compliance burden is potentially broader. Virtual Asset Service Providers are required to register and comply with applicable tax laws, while the wider regulatory framework is being strengthened to improve oversight of the sector.

The changes represent a significant shift from Nigeria’s earlier approach to digital asset taxation. Under the previous regime, gains from the disposal of digital assets were subject to capital gains tax at 10 per cent. The new tax framework provides a more comprehensive regime and introduces specific rules covering digital asset transactions.

The development comes against the backdrop of rapid growth in Nigeria’s cryptocurrency market. The country has remained one of Africa’s most active digital asset markets, increasing the importance of clear tax and regulatory rules.

For investors, the key challenge will be ensuring that profits are properly identified and reported while legitimate losses and allowable deductions are treated correctly under the law.

The government’s stronger focus on digital assets is also aimed at improving transparency and reducing the possibility of tax evasion, money laundering and other illicit financial activities carried out through digital platforms.

As the new framework becomes more established, market participants are expected to adjust their accounting, reporting and compliance systems to reflect the requirements.

For Nigerians involved in cryptocurrency and other virtual assets, the message is increasingly clear: digital transactions are no longer operating outside the tax conversation. Proper documentation, accurate valuation and timely compliance will be essential for avoiding unexpected tax liabilities and penalties.