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

Why Reporting Crypto Income is Crucial in Nigeria

With Nigeria ranking among Africa’s top cryptocurrency markets, understanding how to report crypto income is essential for compliance. The Federal Inland Revenue Service (FIRS) now classifies cryptocurrency transactions as taxable events under the Capital Gains Tax Act. Failure to declare profits from trading, mining, or staking can result in penalties up to ₦50,000 plus interest on unpaid taxes. Proper reporting protects you from legal risks while contributing to national revenue infrastructure development.

Understanding Nigeria’s Crypto Tax Framework

Nigeria taxes crypto as capital gains, not income tax. Key principles include:

• Tax applies only on profits from asset disposal (selling, trading, spending)
• Current capital gains tax rate: 10% of net gains
• No tax on unrealized gains or crypto-to-crypto swaps
• Losses can be carried forward to offset future gains
• NFT sales and DeFi earnings are also taxable

Record-keeping is mandatory – maintain transaction histories for at least 6 years.

Step-by-Step Guide to Reporting Crypto Income

Step 1: Calculate Your Taxable Gains

Use this formula: Selling Price – Purchase Price – Allowable Expenses = Taxable Gain. Track all transactions including fees, airdrops, and mining rewards using crypto tax software like Koinly or Accointing.

Step 2: Complete Capital Gains Tax Forms

File Form CG T1 available on FIRS’ TaxPro-Max portal. Essential details to provide:

• Asset description (e.g., Bitcoin, Ethereum)
• Acquisition and disposal dates
• Naira value at transaction time (use CBN exchange rates)
• Proof of transaction costs

Step 3: Submit Payment

Pay via:

• TaxPro-Max portal
• Authorized bank branches
• FIRS state offices

Deadline: 31st December of the assessment year. Late payments incur 10% penalty plus monthly interest.

Common Crypto Tax Mistakes to Avoid

• Ignoring small transactions: All disposals must be reported regardless of amount
• Using wrong exchange rates: Always convert using CBN’s rate on transaction date
• Omitting non-trading income: Staking rewards and hard forks count as taxable income
• Poor documentation: Save exchange statements, wallet addresses, and transfer records

Frequently Asked Questions (FAQs)

Do I pay tax if I hold crypto without selling?

No. Tax applies only when you dispose of crypto (sell, trade, or spend it). Unrealized gains aren’t taxed.

How are crypto-to-crypto trades taxed?

Yes. Trading BTC for ETH is considered a disposal of BTC. Calculate gain/loss based on Naira value at trade execution.

What if I lost money on crypto investments?

Report the loss on Form CG T1. You can carry it forward for up to 5 years to offset future capital gains.

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

Yes. All crypto disposals are taxable regardless of platform. Maintain P2P chat records and transfer proofs.

How does FIRS track crypto transactions?

Through:

• Centralized exchange reporting
• Bank transaction monitoring
• Blockchain analysis tools

Non-compliance risks account freezes.

Can I deduct crypto investment expenses?

Yes. Allowable deductions include:

• Transaction fees
• Mining equipment costs
• Professional advisory fees

Where can I get help with crypto taxes?

Consult FIRS’ Digital Assets Unit or licensed tax advisors specializing in cryptocurrency. FIRS helpline: +234 9 462 3640.

Disclaimer: Tax regulations evolve. Consult FIRS or a tax professional for personalized advice.