The global adoption of cryptocurrencies, Non-Fungible Tokens (NFTs), and other digital assets has transformed the way businesses operate, invest, and transact. AS these digital assets gain prominence, understanding how they are taxed and its implications becomes crucial for businesses navigating the evolving tax landscape in Nigeria.

In Nigeria, digital assets have seen remarkable growth over the past decade. As one of Africa's largest economies and a hub for blockchain innovation, the country has experienced a significant surge in its usage.

This article analyses the taxation of digital assets in Nigeria and the likely impact on businesses providing digital services.

Capturing the Digital Assets Ecosystem under Nigerian Tax Law

The Finance Act 2020 introduced the concept of "Significant Economic Presence" as the basis for taxing digital and online transactions by non-resident companies. This marked a significant step towards adapting the tax system to the evolving global digital economy while ensuring that digital transactions and services are captured within the tax bracket in Nigeria. Similarly, the Capital Gains Tax Act was amended by the Finance Act 2020 to include Digital Assets in the list of chargeable assets upon disposal.

The term "Digital Assets" means digital representation of value that can be digitally exchanged including, but not limited to, crypto assets, utility token, security tokens, non-fungible tokens (NFT), such other similar digital representation or derivatives of any of the listed or similar assets and any othe asset as may be defined by the relevant authority.

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