Nigeria’s new tax law, or the Tax Act, 2025, has officially entered the digital age. If you’ve ever bought Bitcoin, sold an NFT, made money from YouTube, or even used foreign apps like Netflix, this affects you.
This is Nigeria’s new tax laws as they apply to digital and virtual assets, broken down in simple terms.
What Are Digital Assets?
Think of digital assets as money or valuable things that exist only on the internet. They’re not physical – you can’t touch them – but they have real value and can be bought, sold, or traded. The most easily recognizable example is cryptocurrency, for instance, Bitcoin, Ethereum, Dogecoin. Any other digital coin you can buy on apps like Binance or Luno is a digital asset.
NFTs and in-game assets, including virtual weapons in video games, digital skins for your gaming characters and virtual land in games like Decentraland. All these qualify as digital assets.
Also other digital valuables like domain names (like yourname.com), digital music or video files you can sell and virtual event tickets, all qualify as digital assets.
These are now taxable under Nigeria’s new tax law, or the Nigeria Tax Act, 2025.
When Do You Need to Pay Tax on Digital Assets?
Here’s the key: Just owning digital assets doesn’t mean you owe tax. The government only cares when you make a profit from them. You pay tax on them when you:
- Sell your Bitcoin for more than you paid
- Trade one cryptocurrency for another at a profit
- Sell an NFT you created or bought
- Use crypto to buy something (this counts as selling)
- Give away digital assets (unless to family)
To give an example, of you bought Bitcoin for ₦100,000 in January, sold it for ₦250,000 in June and made a profit of ₦150,000. This ₦150,000 is taxable. It’s the same as if you bought land for ₦100,000 and sold it for ₦250,000 – the profit is what matters.
What If You Lose Money? (Good News!)
Digital assets can be risky. Prices crash. Wallets get hacked. Exchanges disappear overnight. The good news? You can deduct losses from your gains.
Let’s say in one year, you made ₦300,000 profit from selling Bitcoin and lost ₦100,000 when another crypto crashed. Your taxable gain is ₦300,000 – ₦100,000 = ₦200,000.
To claim a loss, you must have records. Acceptable ones include screenshots of your wallet, your transaction histories, receipts from exchanges and evidence of hack or theft (if applicable).
Important: You can only deduct crypto losses from other investment gains – not from your salary or business income.
What About Apps Like Netflix, YouTube and TikTok?
Here’s where it gets interesting. Foreign companies that make money from Nigerians are now expected to pay tax in Nigeria, even if they don’t have offices here.
What this means is that Netflix, Amazon Prime, Spotify, YouTube, TikTok, Instagram and other similar platforms, may now need to pay tax on money earned from their Nigerian subscribers. Online gaming platforms may also need to pay tax on purchases by Nigerian players.
Why Should You Care?
These companies might pass some of these tax costs to users through slightly higher subscription fees, changes in how they operate in Nigeria and new payment methods or procedures.
Foreign Digital Services: The “Significant Economic Presence” Rule
This sounds complicated, but it’s simple: If a foreign company makes significant money from Nigerians, they now have tax obligations in Nigeria.
A foreign digital company is considered to have “significant economic presence” in Nigeria if they, earn over ₦25 million annually from Nigerian users, have a substantial number of Nigerian customers and generate significant revenue from Nigerian data or users
Examples include a streaming service with 100,000 Nigerian subscribers or a social media platform earning millions from ads shown to Nigerians or a cloud storage company with many Nigerian business customers.
What Should You Do Right Now?
If you own or trade digital assets, you should start keeping records. Save all transaction receipts, take screenshots of your wallet balances, keep records of purchases and sales and be sure to document any losses from hacks or crashes.
Also calculate your gains. You can do this by adding up all your profits from digital asset sales and subtracting any documented losses. The remainder is your taxable gain
Understand your tax rate. Individuals pay a regular income tax rate on gains. Companies, however, pay 30% tax on capital gains. Only profits are taxed, not the full sale amount
Remember the new laws will enter into effect on January 1, 2026, so be sure to prepare ahead.
If you use foreign digital services, monitor price changes ahead. Expect some services to become slightly more expensive. Also, companies might change payment methods
In all, stay informed. Watch for announcements from services you use and be prepared for possible changes in how they operate.
Real-Life Scenarios
Scenario 1: Kemi, the Crypto Trader, bought ₦500,000 worth of Bitcoin in 2024. She sold it for ₦800,000 in 2025 at a profit of ₦300,000. According to the new laws, her tax obligation is ₦300,000 at her income tax rate.
Scenario 2: Chidi, the NFT Artist created digital art and sold it as an NFT for ₦2 million. His creation costs were ₦200,000 and he makes a profit of ₦1.8 million. He is expected to pay tax on the ₦1.8 million profit
Scenario 3: Adaora, the Gaming Enthusiast bought virtual items in a game for ₦50,000. She later sold them to another player for ₦30,000. This represents a loss of ₦20,000. She is allowed to this ₦20,000 from other investment gains.
Common Questions and Answers
Q: What if I only trade small amounts?
A: Any profit is technically taxable, but the tax authorities typically focus on significant amounts. Still, it’s best to keep records.
Q: What if I bought crypto years ago but haven’t sold?
A: No tax obligation until you sell or trade. Just owning doesn’t create tax liability.
Q: What about gifts to family?
A: Gifts between spouses and to children are usually exempt, but keep records.
Q: Do I need to report every single transaction?
A: You need to report net gains for the year, but keep detailed records of all transactions.
The Bottom Line
The digital economy is no longer a wild west where anything goes. The government now recognizes that real money is made online, and they want their share.
Digital assets are now fully taxable when you make a profit. You can deduct losses, but you need proper documentation. Foreign companies serving Nigerians will face new tax obligations.
Record-keeping is absolutely essential. However, you don’t have to panic. This doesn’t mean you can’t participate in the digital economy. It just means you need to keep good records, understand your obligations, plan for tax on your digital profits or seek professional help if you’re unsure.
The digital future is here, and yes, it comes with taxes. But with proper planning and record-keeping, you can navigate this new landscape successfully while staying compliant with the law.
How Taxpal Can Help Manage Your Digital Asset Taxes?
Taxpal is a comprehensive tax management platform designed to simplify tax processes for individuals and businesses. Whether you’re dealing with cryptocurrency gains, NFT sales, or complex digital asset portfolios, we provide: Automated tax calculations for digital assets, expert guidance on compliance requirements, personalized support tailored to your situation and record-keeping tools to track all your transactions
Visit our website to choose between paid consultations or portal access, and start your journey to hassle-free tax management in the digital age.