Taxation of Cryptocurrency Transactions and Compliance Challenges in Nigeria

This research examines the tax treatment of cryptocurrency transactions in Nigeria and the compliance challenges arising from the rapid growth of digital asset markets. Nigeria has one of the world's highest rates of cryptocurrency adoption, yet the regulatory and tax frameworks governing digital asset income, capital gains, and VAT treatment remain ambiguous. The FIRS has signalled intent to tax cryptocurrency gains but has not issued comprehensive, enforceable guidance. Using a professional applied research approach, the study surveys 100 active cryptocurrency traders and digital asset professionals in Lagos, Abuja, and Port Harcourt, assessing their awareness of tax obligations, current compliance behaviour, and views on proposed regulatory frameworks. In-depth interviews with five tax lawyers specialising in fintech complement the survey. Secondary data include FIRS press releases, Finance Act provisions on digital assets, and comparative analysis of cryptocurrency tax frameworks in the United Kingdom, South Africa, and Kenya. Descriptive statistics and thematic analysis are applied. The study expects to find that most Nigerian cryptocurrency users are unaware of any tax obligation and that the absence of clear FIRS guidance has created a de facto non-compliance environment. Recommendations include publishing a comprehensive FIRS cryptocurrency tax guidance note, requiring digital asset exchanges to implement mandatory customer verification linked to tax identification numbers, and adopting a simplified flat-rate withholding tax on exchange-realised gains as an interim revenue measure. Keywords: cryptocurrency, digital assets, tax compliance, FIRS, fintech.