Nigeria is introducing a brand new approach to cryptocurrency monitoring based on tax and identity systems reasonably than blockchain monitoring as a part of a significant reform of its tax system.
As a part of the newly introduced tax reform, crypto service providers are required to link transactions to Tax Identification Numbers (TINs) and, if applicable, National Identification Numbers (NINs).
The framework, which got here into effect on January 1, is enshrined within the Nigeria Tax Administration Act (NTAA) 2025 and marks one of the comprehensive tax reforms within the country.
By requiring identity disclosure on the reporting level, Nigeria goals to make cryptocurrency activity visible to tax authorities without the necessity for monitoring blockchain infrastructure.
This allows transactions that were difficult to link to individuals to be matched with income returns, tax returns and historical records.
Identity-based reporting replaces on-chain monitoring
Under the brand new framework, Virtual Asset Service Providers (VASPs) operating in Nigeria can be required to file regular tax returns with the tax authorities containing details of the character and value of the digital asset transactions they facilitate.
These reports must contain customer identification information, including names, contact details and tax IDs, with NINs required for individual users.
The law also allows tax authorities to request additional information from service providers and requires long-term retention of transaction and customer records.
VASPs are also required to report suspicious and enormous transactions to tax authorities and financial investigation agencies, extending oversight to the country's anti-money laundering (AML) framework.
For local regulators, the approach offers a more practical alternative to blockchain evaluation, which might be technically complex and expensive. By linking compliance with tax and identity systems, authorities can track crypto flows while interacting with regulated corporations.
The framework seeks to deal with enforcement gaps created by previous laws. Although Nigeria introduced a tax on crypto profits in 2022, compliance has been uneven because of difficulty linking deals to identifiable taxpayers, in line with local news outlet Tech Cabal.
The mandatory use of TINs and NINs appears to be intended to deal with this enforcement gap.
A worldwide shift in cryptocurrency tax enforcement
The Nigerian model reflects a broader international trend toward identity-based crypto reporting.
The NTAA is consistent with the Organization for Economic Co-operation and Development (OECD) Crypto-Asset Reporting Framework (CARF), which also got here into force on January 1st.
According to the OECD, Nigeria is among the many second countries to have committed to implementing the worldwide framework by 2028.
Nigeria's adoption of such mechanisms signals its intention to integrate into this emerging global reporting network.
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