Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has clarified that income earned from virtual assets, including cryptocurrency, is not newly taxable under Nigeria’s revised tax laws.
Rather, he said such income has always been subject to taxation under the existing Personal Income Tax Act, which the new laws seek to clarify.
Speaking over the weekend during an interactive session with journalists, influencers, and public analysts, Oyedele addressed widespread misconceptions about the scope and intent of the new tax reforms, which are set to take effect on January 1, 2026.
“There is no imposition of tax on individuals who were not previously taxable,” Oyedele stated.
“Online content creators, influencers, income from virtual assets, and other income-generating activities have always been subject to tax. What the new laws do is provide clarity and ensure fairness, such as allowing deductions for losses where applicable.”
He emphasized that income received as a gift, rather than as payment for a transaction, remains non-taxable.
Tax Harmonisation and Burden Reduction
Oyedele also highlighted the administration’s ongoing efforts to simplify Nigeria’s tax system.
“We are reducing over 60 different taxes and levies to fewer than 10,” he said, noting that the goal is to ease compliance and eliminate the proliferation of multiple charges.
Contrary to fears of increased taxation, several levies introduced by previous administrations have already been reversed or suspended. These include the 5% levy on airtime and data, the cybersecurity levy on bank transfers, the carbon tax on single-use plastics, and excise duties on vehicles.
“Our approach is people-centric, growth-focused, and efficiency-driven,” Oyedele added. “These reforms are designed to benefit all Nigerians. Let us work together to ensure effective implementation and position ourselves for the better days ahead of us.”
New tax reforms impose up to 25% on high-income Nigerians
Oyedele disclosed that high-income earners, representing the top 3% of the population, will pay up to 25% of their income in taxes. Meanwhile, Nigerians earning the national minimum wage will be exempt from personal income tax under the newly enacted tax reform laws.
Nigeria’s national minimum wage is currently N70,000 per month, as approved by President Bola Tinubu in 2024.
He emphasized that the reforms are designed to reduce the tax burden on ordinary Nigerians while ensuring that wealthier individuals contribute more to national development.
“The objectives of the reforms have been clear from the very beginning: reduce the tax burden on the masses, harmonise and simplify tax rules to address the multiplicity of taxes, and promote a modern, business-friendly and globally competitive tax system,” Oyedele said. “Our approach is people-centric, growth-focused, and efficiency-driven.”
Clarifying Crypto Taxation: A Practical Breakdown
Economist Kalu Aja offered practical examples to help Nigerians understand how crypto-related income is taxed under the current framework:
- If an unemployed individual receives $100 (aproximately N100,000) from a relative abroad, they do not pay income tax, since the amount is below the N800,000 threshold. However, they may incur VAT and electronic transfer charges.
- If that N100,000 is used to buy Bitcoin and later sold for N200,000, the N100,000 profit is not taxable as income, again due to the threshold.
- If the same investment yields N2,000,000, resulting in N1,900,000 profit, income tax does apply, since the profit exceeds N800,000.
- If the transaction is conducted under a registered company, the individual does not pay personal income tax. However, the company may be liable for other taxes unless its annual turnover is below N50 million, in which case it is exempt from corporate income tax.
The Committee reiterated that the reforms aim to promote fairness, simplicity, and economic growth, while encouraging formalization and protecting small businesses.
What You Should Know
- Last month, Oyedele disclosed that the tax reform laws have been officially published in the government gazette, marking a major step in overhauling the country’s fiscal framework.
- The reforms, signed into law on June 26, 2025, establish a new foundation for taxation, administration, and revenue collection in Africa’s largest economy.
- The four new legislations are the Nigeria Tax Act (NTA), 2025; the Nigeria Tax Administration Act (NTAA), 2025; the Nigeria Revenue Service (Establishment) Act (NRSEA), 2025; and the Joint Revenue Board (Establishment) Act (JRBEA), 2025