Nigeria Plans to Impose Stamp Duty on Crypto Transactions, Potentially Impacting Market Development

Nigeria's tax authorities have issued new regulations imposing stamp duty on certain transactions involving cryptocurrencies, stablecoins, NFTs, and other virtual assets, along with introducing withholding tax. Industry experts warn that this move could hinder the development of Nigeria, one of the world's most active retail crypto markets. The new regulations allow crypto companies to pay taxes in the form of digital assets. Obinna Iwuno, a representative of the Digital Asset Alliance, stated that the new rules may drive trading activities away from regulated platforms, forcing exchanges to act as tax collectors. He advocates for taxing profits rather than taxing the flow of funds. Nigeria is one of Africa's largest cryptocurrency markets, and despite facing regulatory uncertainties, digital assets are widely used for payments, savings, and cross-border transfers. Iwuno added that the current tax system design imposes the highest trading tax burden on the most liquid user base globally.