Spokesperson for the Digital Assets Coalition, Obinna Iwuno, says Nigeria’s virtual asset tax framework should prioritise taxing profits rather than the gross value of transactions, warning that transaction-based taxes could discourage investment, increase compliance costs and undermine the growth of the country’s virtual asset industry.
Speaking during an interview with ARISE NEWS on Friday , Iwuno described the newly introduced tax guidelines as a positive step towards strengthening reporting, documentation and compliance across the sector, but urged policymakers to adopt a tax regime that encourages innovation and long-term growth by focusing on profits rather than transaction values.
On the proposed tax framework, Iwuno said:
“Nigeria should tax profits, not the gross value of transactions.”
He said the virtual asset industry supports taxation because it creates economic value, but stressed that taxes must be structured fairly to encourage participation rather than stifle growth.
“If activities generate economic value, then they should also contribute economic value to the country.”
Iwuno expressed concern over the proposed 1.5% stamp duty on crypto-to-fiat conversions, arguing that it would impose a heavier burden on virtual asset transactions than comparable activities within the traditional banking sector.
“There seems to be a different set of rules for the virtual asset space.”
He warned that repeated transfers involving digital assets would attract multiple stamp duty charges, significantly increasing transaction costs and making Nigeria’s digital asset market less competitive.
“Even if you reverse the same transaction, you’ve already lost 1.5%. Reverse it again, you pay another 1.5%.”
According to Iwuno, the proposed charges could leave Nigerians paying more than 40% above rates in competing jurisdictions, potentially driving users to offshore platforms.
“If it costs Nigerians significantly more than offshore platforms, they will simply move offshore.”
Citing India’s experience with similar tax measures, Iwuno said higher transaction taxes led to a sharp decline in cryptocurrency market activity, warning Nigeria against adopting policies that could produce similar outcomes.
“India attempted the same thing and lost 81% of its market.”
Iwuno also argued that transaction volume figures in Nigeria’s virtual asset market are often misunderstood because repeated movements of the same funds are counted multiple times, inflating overall transaction values.
“The same money can move several times, but each movement is counted as transaction volume.”
He maintained that Nigeria remains one of the world’s leading virtual asset markets, driven largely by strong retail adoption, and urged policymakers to implement tax policies that preserve the country’s competitive position while encouraging continued innovation.
“Nigeria still holds huge potential because of the position we occupy globally.”
Iwuno further called for taxes on virtual asset transactions to be remitted in naira rather than digital tokens, noting that cryptocurrencies are not recognised as legal tender in Nigeria.
“The remittance of taxes should happen in naira.”
Goodness Anunobi
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