Abstract

The emergence of digital assets has challenged the territorial foundations of taxation by enabling borderless economic activities that generate substantial taxable value while complicating regulatory oversight and enforcement. Nigeria’s enactment of the Nigeria Tax Act 2025 and the Nigerian Tax Administration Act 2025, complemented by the Nigeria Revenue Service Guidelines on Taxation of Virtual Assets (July 2026), marks a significant shift towards a comprehensive framework for taxing digital assets. This paper critically examines the resulting regulatory framework, focusing on the paradox of taxing virtual transactions while enforcing compliance within physical and institutional jurisdictions. The study adopts a purely doctrinal legal methodology, analysing relevant legislation, jurisdictional principles and administrative guidelines. Given the nascent implementation of the 2025 Acts and 2026 Guidelines, empirical assessment of enforcement outcomes falls outside its scope. The analysis therefore evaluates the legal framework and its inherent enforcement challenges, drawing comparative insights from South Africa, the European Union and Kenya. The paper finds that although the reforms establish a substantial legal basis for digital asset taxation, significant enforcement gaps remain concerning decentralised finance platforms, peer-to-peer transactions, self-custodial wallets and offshore virtual asset operators. It recommends establishing a Joint Digital Asset Tax Enforcement Task Force, introducing a time-limited Voluntary Disclosure Programme, adopting a Remittance-on-Realization Framework, strengthening blockchain analytics through public-private partnerships, updating administrative guidelines to address emerging technologies, implementing the OECD Crypto-Asset Reporting Framework (CARF), and expanding targeted taxpayer education. The paper concludes that effective digital asset taxation requires technologically informed, internationally coordinated and institutionally integrated enforcement mechanisms capable of translating statutory tax liabilities into practical compliance within Nigeria’s digital economy.

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