In February, Nigeria sued Binance for unpaid taxes and introduced crypto taxation to address economic challenges. The government aims to raise over $81 billion by regulating exchanges and taxing transactions, but enforcement may prove difficult.
Despite being Africa’s largest crypto market, with 22% of its population using digital assets, Nigeria struggles with weak policy execution and corruption. The country’s informal sector, making up 65% of GDP, remains largely untaxed.
The proposed 0.5–1% capital gains tax and 10% VAT on exchanges could generate $250 million annually, but experts warn users may shift to P2P trading to avoid compliance.
To succeed, Nigeria must balance regulation with innovation. Strengthening enforcement through blockchain analytics, digitizing tax processes, and reducing corruption could enhance compliance and boost revenue without stifling adoption.
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