Nigerians challenge crypto tax rules over stamp duty on transactions

Nigeria's proposed virtual asset tax regime is drawing criticism from digital asset users and industry groups who argue that the 1.5 percent stamp duty and one percent withholding tax apply to all transactions, regardless of profit or loss. The Digital Assets Coalition supports taxing real gains and registering platforms but opposes levies on the mere movement of money, citing alignment with standards in countries like the UK, South Africa and Brazil. Aisha Yusuf, who sends USDT to her brother abroad, said she pays N30,000 in stamp duty per N2 million transfer despite making no profit. Bello Tunde, a small importer, said his annual tax burden of N1,260,000 exceeds his net profit of N900,000, forcing him to consider raising prices. Judy Emeka, a nurse, lost over N100,000 on a crypto investment but still paid N13,410 in taxes. Freelancer Christy Chinelo faces N180,000 yearly in conversion duties on earnings already taxed as income. Student Ade Blessing earns N30,000 annually from blockchain rewards—below the N800,000 tax threshold—yet must still file returns and maintain records. The guidelines require taxes in tokens, conflicting with the Nigeria Tax Administration Act, 2025, which mandates payment in naira. Experts warn the 1.5 percent stamp duty could increase costs by up to 500 percent compared to existing trading fees, pushing users to offshore or peer-to-peer platforms. According to the Esya Centre, India's one percent transaction tax led to an 81 percent drop in volume on regulated exchanges within four months, with over 90 percent of trading moving offshore within a year—a scenario Nigerian officials fear could repeat.

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