How to Report Crypto Income in Nigeria: Complete 2024 Tax Guide

With Nigeria emerging as Africa’s largest cryptocurrency market, understanding how to report crypto income is crucial for traders, investors, and businesses. The Federal Inland Revenue Service (FIRS) requires Nigerians to declare profits from digital assets under existing tax laws. This comprehensive guide breaks down the process step-by-step to ensure compliance and avoid penalties.

Understanding Nigeria’s Crypto Tax Framework

Nigeria treats cryptocurrency as a capital asset rather than legal tender. According to FIRS guidelines:

• Crypto-to-crypto trades and crypto-to-fiat conversions are taxable events
• Capital Gains Tax (CGT) applies to profits from disposal of digital assets
• Companies pay Companies Income Tax (CIT) on crypto business profits
• Individuals pay Personal Income Tax (PIT) on crypto earnings classified as income

The standard Capital Gains Tax rate is 10% of net profits, while income tax rates range from 7% to 24% depending on earnings.

Step-by-Step Guide to Reporting Crypto Income

1. Track All Transactions
   Use crypto tax software or spreadsheets to record:
   • Purchase/sale dates and amounts
   • Naira value at transaction time
   • Wallet addresses and exchange records
2. Calculate Taxable Income
   Determine your net gain using this formula:
   (Selling Price – Purchase Price – Allowable Expenses) = Taxable Gain
3. Complete Tax Forms
   File through FIRS’ TaxPro-Max portal:
   • Form CG T1 for Capital Gains Tax
   • Form 000 for Personal Income Tax
   • Form CIT for corporate entities
4. Submit Supporting Documents
   Attach:
   • Transaction history from exchanges
   • Bank statements showing fiat conversions
   • Proof of asset acquisition costs
5. Pay Taxes Due
   Use approved payment channels before the deadline (typically 30 days after filing)

Essential Documents for Crypto Tax Filing

• Digital wallet transaction histories
• Exchange trade reports (Binance, Luno, etc.)
• Receipts for mining equipment or staking costs
• Bank statements showing crypto-related deposits/withdrawals
• Records of airdrops, forks, or crypto gifts received

Common Crypto Tax Mistakes to Avoid

• Ignoring small transactions: All trades must be reported regardless of amount
• Forgetting cost basis: Track original purchase prices to avoid overpaying
• Mixing personal and business wallets: Maintain separate accounts
• Missing deadlines: Late filings incur 10% penalty plus interest
• Omitting DeFi activities: Yield farming and liquidity mining are taxable

Penalties for Non-Compliance

Failure to report crypto income may result in:

• 10% penalty on unpaid taxes
• 21% annual interest on overdue amounts
• Asset freezing through court orders
• Criminal prosecution for tax evasion (up to 5 years imprisonment)

Frequently Asked Questions

Do I pay tax if I hold crypto without selling?

No tax applies to unsold holdings. Taxation occurs only upon disposal through sales, trades, or spending.

How is crypto mining taxed in Nigeria?

Mining rewards are taxed as income at market value when received. Equipment costs and electricity expenses are deductible.

Are peer-to-peer (P2P) transactions taxable?

Yes. P2P trades must be reported using the naira equivalent at transaction time. Maintain chat records as proof.

What if I traded on foreign exchanges?

All global transactions involving Nigerian residents are taxable. Convert foreign currency values to naira using CBN’s exchange rate at transaction date.

Can I deduct crypto losses?

Capital losses can offset capital gains in the same tax year but cannot create a refund. Unused losses carry forward for 5 years.

Is there a tax-free threshold for crypto gains?

No specific crypto exemption exists. The annual NGN 50,000 capital gains exemption applies only to non-business assets.

Staying Compliant in 2024

With FIRS increasing crypto tax enforcement, maintaining accurate records is essential. Use blockchain explorers and exchange tax reports to simplify tracking. Consult a certified tax advisor for complex situations like staking rewards or NFT sales. Proactive compliance protects you from penalties while supporting Nigeria’s digital economy growth.