SiBAN Kicks against Virtual Assets Taxation Model, Calls for Review To Protect Financial Inclusion, Market Growth

The Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) has formally raised concerns regarding the recently released Virtual Asset Tax guidelines introduced by the Nigeria Revenue Service (NRS), warning that taxing transaction movement rather than realised profit threatens to drive crypto trading into unmonitored peer-to-peer (P2P) channels.

In a statement issued by SiBAN President, Mela Claude Ake, the association highlighted critical flaws in the current structure, which layers stamp duty, withholding tax (1–10%) and VAT on top of single transactions, irrespective of whether a trader makes a profit or incurs a loss. On a ₦1 million trade, this cumulative model produces a ₦64,250 tax burden, exceeding the full capital gains tax rate in most comparable jurisdictions before profit has even entered the picture.

“Taxing capital before any profit exists is not merely unfair, it is self-defeating. It teaches people to avoid the very regulated exchanges the guidelines are meant to formalise,” said Barr. Mela Claude Ake in the statement. The president also pointed out that the current stamp duty regime on fiat involves a N10,000 or its equivalent threshold above which a flat N50 rate applies. This approach, Barr. Ake argues, could and should be applied to stablecoins and cryptocurrency transactions.

The statement pointed to international examples to highlight the risks of turnover-based virtual asset taxation. First, Kenya imposed a 3% Digital Asset Tax on gross transfer value in 2023 but scrapped it by 2025 after it pushed trading activity into unregistered channels. Second, India’s refusal to allow loss offsets under its 30% flat tax is widely recognized as a critical design flaw that drove liquidity off domestic platforms.

Ake, recommends four key adjustments for active trading. First, Nigeria should adopt a realised gains model that aligns virtual asset taxation with traditional securities and property by taxing only net gains with cost recovery, ensuring internal wallet transfers and loss-making trades incur no tax.
Second, if a transaction-based tax is necessary for data collection, the government should implement a single-leg transaction levy of 0.1%–0.5% on one side of the trade to replace stacked withholding fees and stamp duties. Third, policy guidelines must incorporate explicit loss relief to allow traders to offset losses against gains and maintain liquidity on domestic, licensed exchanges. Finally, the framework should insert a mandatory review clause 12–18 months post-implementation to evaluate its success based on Virtual Asset Service Provider (VASP) registration figures and exchange volume rather than short-term revenue targets.

The statement by SiBAN also acknowledged the NRS’s ₦40.7 trillion revenue target for 2026, but emphasized that sustainable tax policy must prioritize long-term market visibility over high initial levies.
“The point is not to tax virtual assets lightly as a matter of principle; it is to tax the right event, once, at a rate capable of withstanding competition from the informal market,” Ake further said.