Nigeria Introduces Identity-Based Crypto Oversight with New Tax Reforms

• Nigeria introduces identity-based crypto oversight, linking transactions to tax IDs.
• New reforms simplify crypto regulation through identity verification and tax compliance.
• Nigeria’s crypto regulations align with global reporting standards and frameworks.

Nigeria has taken a bold step in reshaping its cryptocurrency regulatory landscape with the implementation of new tax reforms that prioritize tax compliance and identity verification. This innovative approach, which focuses on linking cryptocurrency transactions to TINs and NINs, marks a significant shift away from traditional blockchain surveillance methods.

With these reforms, Nigeria aims to bring greater transparency to the crypto sector while ensuring better enforcement of tax regulations and reducing the challenges that have plagued previous attempts to track crypto activities.

The new framework, embedded within the Nigeria Tax Administration Act (NTAA) 2025, has already gone into effect and requires crypto service providers to connect transactions to these identification numbers. This system allows tax authorities to track cryptocurrency activity without the need for costly and complex blockchain monitoring tools, creating a more streamlined and efficient oversight mechanism.

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Under the revised framework, Virtual Asset Service Providers (VASPs) must submit regular reports to tax authorities, detailing the transactions they facilitate. These reports must include personal customer information such as names, contact details, and tax IDs, with NINs mandated for individual users.

Additionally, VASPs are required to flag large or suspicious transactions to financial intelligence units, extending Nigeria’s anti-money laundering measures to the crypto space.

A New Approach to Crypto Surveillance

Nigeria’s decision to rely on tax and identity systems, rather than blockchain surveillance, presents a practical solution for regulating the crypto industry. Blockchain analysis tools are often complex and costly, which makes them less accessible for regulators. By instead linking cryptocurrency activities to existing tax systems, Nigeria has created an efficient and cost-effective means of ensuring compliance.

This identity-based reporting system aims to close enforcement gaps that have hindered tax compliance in the past. Although Nigeria introduced a tax on crypto profits in 2022, enforcement was challenging due to the difficulty in associating trades with identifiable taxpayers. The introduction of TINs and NINs now aims to eliminate these hurdles, ensuring that transactions are clearly tied to individuals and their tax records.

Alignment with Global Standards

Nigeria’s new regulatory framework aligns with international efforts to increase transparency in cryptocurrency transactions. It follows the lead of the Organization for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF), which took effect globally on January 1, 2025.

As part of a growing global trend, Nigeria’s adoption of these mechanisms signals its commitment to participating in an international network of crypto reporting, which is expected to be fully implemented by 2028.

In essence, Nigeria’s updated approach to cryptocurrency regulation aims to strengthen its tax regime while improving compliance within the crypto sector. By integrating digital asset activities into the country’s broader financial oversight mechanisms, Nigeria is positioning itself as a key player in the global effort to regulate cryptocurrencies more effectively.

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