The brand new tax reform has lastly taken impact, with cryptocurrency transactions now topic to tax underneath the Nigeria Tax Administration Act (NTAA).
The NTAA, which got here into pressure from January 1, 2026, launched important compliance calls for on Digital Property Service Suppliers (VASPs).
VASPs are additionally mandated to register with the tax authority, to retain detailed KYC information for seven years, and to report massive or suspicious transactions to each the tax authorities and the Nigerian Monetary Intelligence Unit (NFIU).
Non-compliance attracts a N10 million penalty within the first month and N1 million for every subsequent month, alongside potential licence suspension or revocation by the Securities and Change Fee (SEC).
That is an unfamiliar improvement within the crypto area, leaving service supplier and merchants weak to penalties.
On this interview with Nairametrics, Tradepal AI co-founders, Femi Adegolu and Adebiyi Ayoyinka talk about compliance gaps, Ghana parliament’s legalisation of crypto, and how companies can keep away from penalties.
Nairametrics: Out of your perspective, what are probably the most important compliance gaps that you simply suppose this tax reform is making an attempt to cowl for companies and people?
Femi Adegolu: Essentially the most important compliance gaps that this new tax legislation exposes are the shortage of transparency and, after all, transaction monitoring. Final 12 months alone, tons of of billions of {dollars} handed by means of Nigeria, by means of P2P, those that purchase and promote Bitcoin, foreign exchange, {dollars}, kilos, euros. And the federal government sees all these large numbers, however these are simply volumes.
To be very trustworthy, the revenue that has been generated will not be in keeping with what the federal government thinks. Even fintechs, I’ve fintechs which have processed over $4 million in quantity, however what are their web earnings? When you deduct working bills, you discover out that these guys are generally overtaxed by the federal government. So these loopholes are what this new tax regime will expose.
As a result of each firm proper now doesn’t perceive the significance of getting narrations. Like, generally once I need to ship cash, I don’t add narrations. However imagine me, any more, I’m beginning to do this.
And so what this factor exposes is transparency. As a result of the federal government sees a lot quantity passing by means of our trade, the crypto trade specifically, they usually really additionally have no idea the nitty-gritty of what a variety of these operators are dealing with, particularly OTC merchants. And for a very long time, a variety of fintechs, service suppliers who really provide crypto providers, have been in search of methods to get licenses from SEC.
However what number of of them can afford to pay one billion naira? So I believe that is the first step, as a result of now these guys are going to be submitting taxes and likewise letting the federal government know, ‘that is the influx, that is the outflow, that is the income, that is the turnover we’re making, that is the revenue that we now have made, and that is how a lot of taxable revenue that we will remit to the federal government’. These are the issues that I do know considerably will impression from this new tax regime.
Nairametrics: What’s the lacking hyperlink between the same old crypto buying and selling and this new tax regime that startups ought to be addressing with their options?
Adebiyi Ayoyinka: I’d like to say this can be a very distinctive interval within the crypto trade.
So it’s a really particular time that we now have to completely put together for, and over time, from my involvement to date in doing OTC trades and even the conventional crypto commerce, lots of people are likely to take part blindly in a single or two points of the trade.
Most of us do issues in a really disorganised method, whereby we don’t hold correct data of issues that occur throughout day by day transactions or enterprise. This has created a mindset for each single OTC dealer, who tends to need to proceed following this similar sample again and again.
As a lot as I don’t like that the tax factor is right here, I really like the truth that it’s taking place proper now to present a future to everybody that have interaction in buying and selling digital property, in contrast to the best way we all the time have it earlier than, so now issues are higher, if we begin doing issues the best means.
Simply think about when an OTC dealer or service provider goes shopping for and promoting and pays out an enormous sum of cash, and on the finish of the day, you don’t are likely to know even the quantity you’ve made on that exact transaction. You don’t know the quantity you’ve made in per week, in a month, or in a 12 months.
So these gaps and this suddenness are actually affecting a complete lot, and in the case of taxing now, the federal government are prepared and ready to begin taxing folks, so now could be the time when merchants or retailers see the place they’ve been doing issues wrongly as a result of they’re all considering how do I survive this?
And that’s the place our platform is available in. Tradepal AI ensures that transactions are correctly documented. It has an audit tray the place you’ll be able to return there inside the week or month to evaluate these transactions, then print out the report everytime you’re going to a tax man.
Now we have the software program with options in place whereby you’ll be able to grant your login particulars to an auditor to entry your dashboard and audit your account remotely, whilst you monitor it from your personal gadget.
Nairametrics: Proper now, most Nigerians view this digital property taxation as very unclear and unenforceable. Do you share the identical view?
Femi Adegolu: So in a nutshell, the federal government has been in search of a method to tax the crypto trade. It’s an early-stage trade, no less than lower than twenty years.
So, 2025, I’d say was the 12 months of Institutional adoption of cryptocurrency throughout the globe, from the US presidency to different international locations, even creating their very own cash just like the Central African Republic. Many different international locations are additionally constructing reserves for his or her crypto property. El Salvador is already doing it.
Many international locations throughout the Center East and Southeast Asia are already storing Bitcoin, and so for Nigeria, which is the biggest crypto market in Africa, the place tons of of billions of {dollars} are being processed yearly, we imagine that we’re the perfect market to have the ability to have this experiment of taxing digital property.
Service suppliers have been in search of a method to keep compliant the previous couple of years, and naturally this provides most particularly the OTC merchants, BDCs, foreign exchange merchants that capacity to take a seat down on the identical desk with the federal government, as a result of now they pay taxes like different companies, they pay tax like different company entities, and this additionally brings in additional regulatory readability, as a result of for Tradepal AI we now have additionally constructed a KYC system that can allow the federal government additionally know who the cash is coming from, the place the cash goes to, how the cash is being spent, and what’s additionally taxable.
You possibly can have an influx of N1.5 billion from only one transaction, however that’s simply influx, that’s not turnover, that’s not revenue, and that’s not earnings. so it’s our modern instrument that we’re going to use to make this readability way more clear to the federal government, saying that this 1.5 billion that was despatched to this man’s account will not be flip over, it’s simply an influx and that is what revenue this particular person created from this, and that is the proof, that is the proof that it’s the revenue that this man created from this specific transaction.
In order that the federal government has a lot belief in our system and trade, additionally, the federal government believes that we’re extra like companions. As a result of a variety of occasions, one of many issues that has made the crypto area at loggerheads with the federal government is as a result of it appears just like the crypto trade will not be supportive of what legal guidelines or rules the governments are passing, as a result of it isn’t beneficial, however when we now have this new tax legislation and these property have been taxed, we’ll have that readability.
The federal government may have readability on how a lot is being processed in a single 12 months. Now we have information, and we will provide assist by way of analysis, so those that need to write editorials concerning the crypto area can come to us, and we’ll have the ability to present all that information and worth for them.
Nairametrics: Just lately, Ghana’s parliament legalised cryptocurrency. What do you suppose this imply particularly when we now have an enormous inhabitants of Nigerians in Ghana who commerce crypto?
Femi Adegolu: Actually, I do know a variety of Nigerians who commerce crypto in Ghana who’re pleased with that new legislation. In Nigeria, for instance, crypto will not be unlawful, however the one subject is that the CBN and SEC will not be in alignment by way of how these legal guidelines are being executed or applied.
And I’ll say for the information from Ghana, I’m very excited for it as a result of it exhibits that Ghana is considering forward, they’re considering of the long run, positioning themselves, as a result of if you happen to have a look at the most important conferences, it’s all going to Ghana or Kenya and that’s as a result of there’s a variety of regulatory disparities in Nigeria and no investor desires to put money into the nation that has no secure regulation or legislation that may shield them. It’s referred to as investor safety.
However with our taxation legislation, it will be in sync with what the federal government has executed already previously with the previous legal guidelines, with the previous coverage of blockchain paperwork which were enacted throughout the time of President Buhari. We’re going to see way more involvement with this new dispensation and that will even allow the sub-Saharan commerce in West Africa appeal to way more investments, it would appeal to way more startup funding.
It’s additionally going to allow extra startups confide in the West Africans sub-Saharan area, and with Nigeria well-positioned to be shut brothers to Ghana, we’ll see lot extra legislative legal guidelines handed within the Nationwide Meeting.
We’re going to see significantly better rules handed by our authorities as a result of Ghana is our closest brother right here in Africa. And I’m certain that can allow extra inflows. So congratulations to Ghana, we’re completely happy for them, we all know that Nigeria can be main in that entrance to allow crypto change into a way more on a regular basis factor that we use for our day by day commerce.
Nairametrics: How ready do you suppose the Nigerian SMEs, fintechs and startups are for automated tax computation and reporting?
Femi Adegolu: To be very trustworthy, I’ll say the casual sector and SMEs will not be so ready and that’s why we’re right here to assist them, some months in the past, we now have really foreseen that that is going to occur when Ambassador Adebiyi instructed me about this concept that we have to construct one thing that can assist companies, fintechs, and repair suppliers change into very compliant and likewise keep away from tax penalties by the federal government.
Already, there’s a variety of information flying round about how crypto taxes ought to work; the SMEs are additionally very scared. I can let you know there’s a variety of concern in Nigeria, however folks shouldn’t be scared. I’m very certain with what we’ve constructed already, it’s similar to a plug-and-play. Individuals may come, log of their trades, have entry to correct information, report conserving, transaction monitoring, and transparency, as a result of now Tradepal AI can be that instrument that can assist channel narrative.
It’s not a taxman that can really come to let you know how a lot is coming into your bank account, It’s you that can really say that is cash that has come into my bank account as my very own cash, that is the opposite one coming as a mortgage.
So it’s in your personal capability to inform the federal government that that is how a lot you make, and that is how a lot you might be really paying again as mortgage. So if SMEs use the best platform, they’ll be extra ready,
I can let you know proper now, a variety of SMEs will not be ready as a lot as they suppose, a variety of SMEs are additionally struggling to see how they may slot in in order to be very compliant, notably in paying taxes, due to the income they make.
As a result of the federal government sees these billions passing by means of accounts, however they don’t know that these billions are simply perhaps a millionaire in revenue or two million in revenue. So what Tradepal goes to do is to ensure that folks can even have that confidence after they need to file their taxes. They’ve correct data of what they’re giving out or tendering to the federal government as taxable revenue.
Nairametrics: What function do you suppose Nigerian banks and fintechs play in enabling or hindering digital asset tax compliance?
Adebiyi Ayoyinka: I don’t suppose banks have the aptitude of hindering such a factor proper now as a result of governments, too, are absolutely ready as a result of the thought of the federal government is to place extra folks into the tax web, and that’s what they’re really doing. Just lately, we noticed a information report going round that the FIRS has said that the NIN of particular person customers of the bank can be used as tax ID. Whereas the registration variety of each firm is their enterprise tax ID.
What is that this telling you? That is telling you that extra banks will really comply as a result of there’s no escape route for everyone who makes use of a bank account, as a result of they may really adhere and need to observe the laid-down guidelines and legal guidelines of the federal government so as to not be sanctioned.
So they may need to be sure that each consumer of the banking system is adhering to the brand new tax legislation, and whoever will not be adhering or transferring such quantity throughout bank accounts can be sanctioned or they may alert the FIRS over such particular person. So I imagine it’s going to be very troublesome for people or Nigerians to really keep away from paying tax.
A very powerful factor now could be to file your tax return even if you’re not making a revenue, which I imagine that’s what we ought to be wanting ahead to.
Nairametrics: What’s your relationship with regulatory our bodies just like the SEC?
Femi Adegolu: We are literally engaged on getting a partnership with the NRS. We imagine that partnership may be very strategic for us as a result of simply doing remittance handles all of the collections for presidency companies. If you wish to get your passport funds, if you wish to get your NIN fee, any fee in any respect goes by means of remittance.
So we need to have that strategic partnership with the NRS the place Tradepal AI would even be that accomplice that helps them to do the collation of taxes that might be generated from the service suppliers and operators within the digital asset trade, as a result of that is likely one of the industries that the federal government has not been in a position to determine previously. And I believe lastly we now have that innovation that can energy this method. We’re additionally going to be partaking the SEC.
We’re supporting this dispensation in enabling our expertise to energy these collections and information, as a result of a very powerful factor right here for the federal government is information. SEC wants information, the NRS wants information, and even NITDA wants information. So we’re partaking these authorities companies. We’re additionally partaking each stakeholder, each within the public sector and the non-public sector, to come back collectively and have the ability to champion this innovation that we now have created.
That is going to be a game-changer for Nigeria and for Africa as a complete, as a result of Nigeria has all the time been the enormous of Africa. We’re the primary movers, and we perceive the impression of what this product goes to do within the markets. Significantly, compliance is a really main factor.
In 2025, authorities has taken time to get serious about crypto, not simply Nigeria, however all around the world. So 2026 goes to be a giant 12 months for compliance. And we’re right here, we’re ready for this new rising sector.
Nairametrics: Knowledge safety is a giant deal for a lot of. How safe is folks’s information on the platform?
Adebiyi Ayoyinka: To date, we’re licensed by the Nigeria Knowledge Safety Fee (NDPC), and the information is encrypted. We perceive the significance of knowledge privateness and information safety.
Nairametrics: Now we have seen a few pushbacks from folks concerning this tax reform, some are saying it’s designed to make the poor poorer, and the wealthy richer. What do you suppose is the actual subject?
Femi Adegolu: So first issues first, all around the world, no one likes to pay taxes, not simply in Nigeria alone. In case you go to the UK, the US, or Canada, and also you run a ballot right now, I can let you know that 95% of the inhabitants doesn’t need to pay taxes. Actually, the tax bracket in Nigeria is basically low. And I believe that this specific legislation was meant to additionally additional drive authorities income era.
It’s not my very own notion that can really change what the federal government desires to do. However I believe slightly than complain, we now have really constructed an answer that can energy this specific compliance tradition that we are actually having for the reason that begin of January.
Lots of people will not be going to be high quality with it. And as I stated earlier, it’s the identical factor that occurs in each different nation on this planet. Within the UK, folks pay as a lot as 40% private revenue tax. In Nigeria, it’s between 15 to 25%. So actually, there’s instructional content material that we’re going to place out. And we’re already doing that on our socials to allow folks perceive that this tax factor will not be one thing that might destroy you as an individual or that might really kill your small business.
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