August 2026 – Pavestones Legal

NIGERIA’S NATIONAL DIGITAL CLOUD POLICY: WHAT BUSINESSES NEED TO KNOW

August 28, 2026/in News, Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE & ENIOLA SOGBESAN

Introduction

On 17 August 2026, the Federal Government of Nigeria introduced the National Digital Cloud Policy (the “Policy”), replacing the Nigeria Cloud Computing Policy 2019. The Policy is effective immediately, save for the sovereignty provisions contained in Part III, which remain subject to Presidential approval.

The Policy represents a significant evolution in Nigeria’s approach to cloud computing. While the 2019 policy primarily focused on encouraging the adoption and use of cloud technology, the Policy supports the deliberate development of a domestic cloud and data infrastructure ecosystem in Nigeria.

Among other objectives, the Policy seeks to –

attract investment in cloud and data infrastructure;
develop Nigeria as a regional digital services exporter;
expand and diversify domestic capacity;
modernize government service delivery and
secure government and regulated data proportionately.

In this newsletter, we examine the key provisions of the Policy and consider their practical implications for cloud service providers, data centre operators, regulated entities and businesses that use cloud services in Nigeria.

Scope and Application

The Policy establishes a tiered framework which can be broadly understood across three distinct categories:

General Market Framework: Parts I and IV of the Policy establish the overarching framework applicable to participants in Nigeria’s cloud market. These provisions address matters such as investment, trade, market development and the implementation of the Policy.
Public Sector: Part II of the Policy is applicable to Federal Ministries, Departments, Agencies and entities exercising public functions on their behalf. State Governments, the Federal Capital Territory, and Local Governments may participate voluntarily under the Policy.
Sovereign Data: Part III of the Policy is specifically applicable to sovereign data. Sovereign Data in the Policy refers to-
i. data generated by the Federal Government, its MDAs, or by entities performing public functions on their behalf; and
ii. data generated pursuant to a Federal regulation, license, or directives issued by the Federal Government and such data must be expressly designated as sovereign.

Key Policy Incentives

Investment Incentives
Qualifying Investment may benefit from a range of incentives such as –
- import duty exemptions, waivers, or concessions on data centre equipment and
- access to priority status and equivalent tax incentives for qualifying strategic digital infrastructure projects.
Regulatory Facilitation and Investment Certainty
The Policy recognizes regulatory friction as a material deterrent to infrastructure investment. Accordingly, the Federal Government will among others–
- coordinate investment promotion to eliminate duplicative approval requirements and reduce administrative delay;
- establish a single coordinated facilitation point for qualifying cloud and data centre investments; and
- publish the licensing, compliance, and operational requirements applicable to cloud and data infrastructure investments.
Capital Mobility and Foreign Exchange Incentives
To ensure the effective realization and repatriation of investments, the Policy ensures the following:
- lawful repatriation of capital, profits, and dividends in accordance with applicable investment and foreign exchange regulations;
- prompt issuance of certificates for qualifying investments to secure repatriation rights; and
- all earnings from cloud and data services provided to customers outside Nigeria will be treated as export earnings eligible for foreign exchange and export incentives.
Energy Access
The Policy provides a framework to support cloud and data centers in accessing reliable electricity, including opportunities to utilize renewable and alternative energy solutions.Importantly, the beneficiaries of these incentives are required to commit to capability development programmes, including knowledge transfer and skills development to Nigerians.

Eligibility and Qualification

To be eligible to benefit from incentives under the Policy, cloud and data centers must among other considerations demonstrate –

deployment, or committed planned deployment, of qualifying infrastructure in Nigeria;
registration under the Digital Infrastructure Assurance Registration scheme;
participation in the National Digital Marketplace framework, where seeking government business;
alignment with national interoperability requirements; and
compliance with applicable data protection, cybersecurity, and consumer protection obligations.

Sovereign Data Classification

As noted above, Part III of the Policy is applicable to sovereign data which is categorized into four–

Level	Category	Data Type	Hosting Requirement
4	Classified	National security, defence and critical infrastructure	Hosted exclusively on infrastructure physically located in Nigeria under sovereign control, with processing within Nigeria.
3	Highly Sensitive	Sensitive personal data, regulated data including financial, biometric, identity and health data.	Stored in Nigeria, with continuous sovereign recovery capability; processing in approved environments subject to safeguards.
2	Sensitive	Internal government operational data, administrative records, and data that could cause moderate risk if disclosed	May be deployed in hybrid environments, including approved international infrastructure, subject to prior authorization.
1	Open	Public access data or low risk information with minimal data if disclosed.	May be hosted on any compliant infrastructure without residency restriction.

Implementation Timeline

The Policy will be implemented in phases with an overall timeline of 24 months from the issuance date.

Next Steps

Cloud providers and data centre operators – Assess eligibility for incentives and the process for registration under the Digital Infrastructure Assurance Registration scheme.
Regulated entities – While the Policy does not impose general data localization requirements, however given that the category of what constitutes “regulated data” is not exhaustive and includes financial, biometric, identity and health data, this data category should be closely monitored where there is the expansion of the data types.
Businesses using cloud services: All commercial data remain unaffected by the sovereignty provisions as the Policy provides regulatory certainty for continued use of international cloud services.

Conclusion

The introduction of the National Digital Cloud Policy is an important shift in Nigeria’s digital infrastructure and data governance landscape. By combining investment incentives, regulatory facilitation, domestic infrastructure development and a risk-based approach to sovereign data, the Policy seeks to strengthen Nigeria’s cloud ecosystem while promoting secure and resilient digital services.

The practical impact of the Policy will depend largely on the development of clear implementation guidelines, the achievement of the key performance indicators set out in the Policy, and the Presidential approval of the sovereignty provisions in Part III.

The Policy presents significant opportunities for investment, innovation and digital transformation. Its success, however, will require sustained collaboration among government and other stakeholders to ensure that Nigeria’s cloud infrastructure develops in a secure and commercially viable manner.

AI REGULATION IN THE EU AND NIGERIA: AI WATERMARKING

August 21, 2026/in News, Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU & OLUWAYEMI IBIRINDE

INTRODUCTION

On 2 August 2026, the transparency obligations under the European Union Artificial Intelligence Act (the “EU AI Act”) became applicable. These include requirements under Article 50 for certain AI-generated or manipulated content to be identifiable through machine-readable markings and, in specified circumstances, disclosed to users.

The effect of these developments’ cuts across global AI use and will also have implications for Nigerian businesses, particularly those using AI services provided by global technology companies or operating across borders. This is underscored by the participation of about 190 organisations, including major AI providers such as Anthropic, Google, Meta, Microsoft, Mistral and OpenAI, in the European Commission’s Code of Practice on Transparency of AI-Generated Content.

We therefore consider it important to highlight this development and its implication for Nigerian businesses, while examining Nigeria’s existing regulatory framework for AI use and the need for a more comprehensive AI governance framework.

WHAT ARE THE EFFECTS OF THE EU AI WATERMARKING REQUIREMENT?

The introduction of AI-generated content marking and disclosure requirements has several implications for businesses as follows:

Cross-border Application: The EU AI Act applies to any AI tool or output used in the European Union, even for companies operating from outside the EU. Accordingly, Nigerian companies providing AI services or outputs for use in the EU may be subject to applicable transparency requirements, including the requirement to watermark AI-generated content.
Dilution of Original Ownership: Users both inside and outside the EU using AI tools need to be aware that once original human ideas are fed into an AI system, the resulting output gets watermarked and may make it difficult for the creator to prove ownership of their underlying intellectual property or demonstrate that the core work was human authored
Consumer protection and fraud prevention: It is expected that, with the use of AI watermarks, AI-generated content will be more readily identifiable, and therefore support the identification of deepfakes, impersonation, fraudulent content, and other forms of deception.

HOW IS AI REGULATED IN NIGERIA

Nigeria has no single comprehensive AI statute like the EU AI Act. AI-related obligations instead sit within existing laws and other AI governance structures as follows:

Nigeria Data Protection Act (NDPA) Data protection:
The key regulation in Nigeria governing the use of AI is the Nigeria Data Protection Act, 2023 (NDPA). While Nigeria has no comprehensive AI-specific law comparable to the EU AI Act, the NDPA regulates AI use where personal data is involved. This is particularly important where businesses use foreign AI providers, as these services may involve the processing or transfer of personal data outside Nigeria. Businesses should therefore assess their AI tools for compliance with the NDPA and applicable cross-border data protection requirements.It also clearly restricts and places safeguards around decisions made solely through automated processing where such decisions may have legal or similarly significant effects on individuals, reinforcing the need for appropriate human oversight and transparency.
Federal Competition and Consumer Protection Act (FCCPA)
Another regulation relevant to the use of AI in Nigeria is the Federal Competition and Consumer Protection Act, 2018 (FCCPA). The FCCPA sets clear consumer protection requirements that apply to AI-driven marketing, pricing, and other consumer-facing activities. It prohibits false, misleading, or deceptive representations and unfair contract terms. AI-generated content, recommendations and decisions must comply with these consumer protection standards.
SEC Rules on Robo-Advisory Services
Similarly, the SEC Rules on Robo-Advisory Services regulate the use of automated, algorithm-based tools to provide investment advice. The Rules require robo-advisers to identify and mitigate algorithmic bias and clearly disclose to clients how the technology works, including its assumptions, limitations and associated risks. Therefore, where AI is used to provide investment advice, compliance with these requirements is mandatory.
Copyright Act, 2022
The Copyright Act, 2022 protects original works created by human authors but does not expressly address AI-generated works or determine authorship where content is created by AI. Businesses using AI-generated content should therefore consider copyright ownership and infringement risks, particularly where AI tools generate or reproduce existing protected works.
The National Artificial Intelligence Strategy
The National Artificial Intelligence Strategy (NAIS) provides the policy foundation for responsible, ethical and inclusive AI adoption in Nigeria. While it does not create binding AI-specific obligations in the same manner as the EU AI Act, it provides a framework for the development of Nigeria’s AI governance and regulatory approach.
The National Digital Economy and E-Governance Bill, 2025
The National Digital Economy and E-Governance Bill, 2025, which is not yet law, proposes a more comprehensive framework for AI governance in Nigeria. It includes provisions on AI risk classification, monitoring of AI-related risks, accreditation of independent AI system auditors, inspections, audits and enforcement. If enacted, the Bill could significantly strengthen Nigeria’s regulatory framework for AI and move the country closer to a dedicated AI governance regime.Taken together, these instruments demonstrate that Nigeria currently regulates aspects of AI use through existing laws and emerging policy frameworks but does not yet have specific requirements for AI watermarking comparable to those under the EU AI Act.

CONCLUSION

The transparency requirements under the EU AI Act marks a significant shift towards more accountable and traceable AI use, with implications extending beyond the EU as global AI providers adapt their products and compliance practices to emerging regulatory standards. While Nigeria already has several laws and policy instruments that regulate aspects of AI use, it would benefit from a comprehensive AI governance framework that brings these obligations together, provides greater regulatory certainty and addresses AI-specific risks.

As the regulatory landscape evolves, it is important for businesses to take a proactive approach to AI compliance by applying appropriate human oversight and seeking professional advice when adopting or deploying AI technologies.

WHEN THE REGULATOR TAKES THE BOARD: THE LEGAL LIMITS OF NERC’S INTERVENTION

August 14, 2026/in News, Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE & EFE OKPARAVERO

Introduction

On 10 August 2026, the Nigerian Electricity Regulatory Commission (“NERC”) issued Order No. NERC/2026/086 in respect of Kaduna Electricity Distribution Plc (“KAEDC”), dissolving its existing board and appointing an interim board of “Special Directors” to oversee the company. NERC has also appointed an Administrator and commenced a 12-month process aimed at identifying a new core investor for KAEDC.

The intervention follows what NERC describes as a “grave situation”, including prolonged regulatory and market defaults, inadequate investment, operational weaknesses and significant outstanding market obligations.

The Order raises an important question for Nigeria’s electricity sector, which is how far can NERC go in taking control of a privately owned electricity distribution company without crossing the line between regulatory intervention and corporate ownership?

Taking control is not taking ownership

Section 75 of the Electricity Act, 2023 (“Electricity Act”) permits NERC, following an inquiry into the conduct or affairs of a licensee, to intervene where it determines that the licensee is in a “grave situation”.

The statutory triggers include;

an inability to discharge obligations under the Act or licence terms,
prolonged default in complying with statutory or regulatory obligations,
a protracted management crisis detrimental to shareholders, consumers or the operation of the undertaking, or
insufficient assets to meet liabilities with an imminent risk of receivership.

Where these circumstances exist, NERC is empowered to issue an interim order dissolving and removing the board and appointing Special Directors and an Administrator to manage the undertaking, notwithstanding anything contained in any written law and the memorandum and articles of association of the undertaking/licensee.

Accordingly, while the usual rights of shareholders to appoint or remove directors are displaced for as long as the intervention remains in force, the intervention does not transfer the shareholders’ ownership of KAEDC to NERC. The shareholders retain their shares and their underlying proprietary interests. What changes is the control over the affairs of the licensed undertaking.

Implications of an unsuccessful intervention

By the provisions of the Electricity Act, where the state of affairs of the licensee does not improve after NERC has taken the appropriate measures, NERC shall revoke the licence.

The Act therefore contemplates progression from regulatory intervention to licence revocation where the intervention fails, and ultimately to the sale and transfer of the undertaking. It provides for the sale and transfer of the undertaking and addresses the treatment of liabilities and security interests.

Accordingly, if the intervention fails and a core investor has been identified, NERC may in line with the Electricity Act, proceed to revoke KAEDC’s licence and invoke the statutory process for the sale of the undertaking. This must however follow the statutory process:

Regulatory intervention: This is the stage KAEDC is currently at and is critical to the preservation of its existing shareholding. At this stage, the focus is on addressing the circumstances that gave rise to the intervention and restoring the undertaking to a viable position.
Licence revocation: If the regulatory intervention fails and the underlying issues are not resolved, NERC may revoke KAEDC’s licence in accordance with the Electricity Act. Revocation would trigger the statutory process for dealing with the undertaking.
Compulsory sale: Following the licence revocation, NERC shall invoke the statutory sale mechanism under Section 77 of the Electricity Act and direct the sale of the undertaking.

Implications of the Intervention for KAEDC’s Creditors

The intervention has immediate implications for KAEDC’s creditors. While NERC has not revoked KAEDC’s licence or commenced the statutory process for the sale of the undertaking, the Order places KAEDC under regulatory control and introduces measures governing the company’s affairs during the intervention period.

For example, the Order directs the Corporate Affairs Commission not to register any change in KAEDC’s shareholding or directorship during the intervention period without NERC’s prior written approval. NERC has also directed the Administrator, Bureau of Public Enterprises, Nigerian Bulk Electricity Trading Plc, Nigerian Independent System Operator and other material creditors to reconcile KAEDC’s liabilities and file a liability-management plan with the Commission within 90 days from the commencement of the Order. This means that creditors should endeavour to file their interests with the Commission. The Order further provides that the liability-management plan may allow for interim warehousing of the liabilities. Under this arrangement, such warehoused liability would not be immediately enforceable but temporarily preserved for later settlement as part of the sale transaction. The warehoused liabilities would need to be disclosed in the transaction documents in relation to the sale, and prospective investors would be required to set out in their bids how they propose to settle those liabilities.

The above becomes even more significant if NERC proceeds to a statutory sale as the Electricity Act provides that the new purchaser of the undertaking gets it free of KAEDC’s existing debts and other encumbrances. Therefore, the creditors are precluded from filing any claims against the undertaking or its assets after the sale. Instead, they must recover what they are owed from the funds paid for the purchase of the undertaking, according to their order of priority.

In the interim, however, the key point is that KAEDC is in a regulatory intervention, not yet a statutory sale. Hence, Creditors should seek to have their interests expressly captured in the liability-management plan, where they can be warehoused and settlement provided for in the event of a sale. If they fail to do so, their principal avenue for recovery may be limited to the purchase price paid by the purchaser, distributed in accordance with the applicable order of priority, which may ultimately be insufficient to satisfy their outstanding debts.

The legal limits of NERC’s power

NERC’s intervention powers are broad, but they are not unfettered. Their exercise remains subject to the statutory framework established by the Electricity Act. In particular:

Statutory threshold: There must be a proper basis for concluding that the licensee is in a “grave situation” within the meaning of section 75 of the Electricity Act with at least one of the four statutory triggers identified above being present.
Statutory purpose: The intervention must be directed towards the statutory objectives underlying section 75 of the Electricity Act, including maintaining the continuity of electricity supply and resolving the particular statutory trigger that warranted the regulatory intervention.
Legal constraints: NERC’s exercise of its powers remains subject to applicable legal principles. Accordingly, issues of compliance with statutory preconditions, procedural requirements, and the rationality of the decision may arise in any litigation challenging the intervention.

These limitations do not, however, mean that NERC requires shareholder approval before exercising its power to remove or replace a licensee’s board.

Recommendations

For KAEDC and its shareholders: KAEDC and its shareholders should closely monitor the intervention and ensure strict compliance with the requirements of the Order. In particular, they should obtain legal advice on the extent to which the intervention affects existing shareholder rights, board powers, contractual arrangements and proposed changes to the company’s shareholding or directorship.
For creditors: Creditors should undertake an immediate review of their existing exposures to KAEDC, including the nature and enforceability of any security interests. They should also assess the effect of the Order on enforcement rights and engage with the liability-management process within 90 days as directed by NERC, to ensure that their claims are properly recognised and protected.
For NERC: NERC should ensure that the intervention remains closely tied to the statutory conditions and objectives under section 75 of the Electricity Act. Any further measures taken during the intervention should have a clear statutory basis and be implemented in a manner that provides sufficient certainty to KAEDC, its shareholders, creditors and prospective investors.
For prospective investors: Potential investors should conduct enhanced legal and regulatory due diligence before committing to KAEDC. This should extend beyond KAEDC’s financial position to include its regulatory obligations, outstanding liabilities, existing security interests, shareholder structure and the statutory implications of any subsequent licence revocation or sale.
For other DisCos and their stakeholders: Other electricity distribution companies should treat the KAEDC intervention as a regulatory warning. DisCos should strengthen compliance, investment, governance and financial-management frameworks to address regulatory and market defaults before they develop into circumstances capable of triggering intervention under section 75 of the Electricity Act.
For policymakers and regulators: The KAEDC intervention also highlights the need for greater clarity around the relationship between regulatory intervention, shareholder ownership, creditor rights and the proposed replacement of a core investor. Clearer guidance on how a replacement investor is to acquire an interest during an intervention would provide greater certainty for existing shareholders, creditors and prospective investors.

Conclusion

The KAEDC intervention is more than a decision to remove a board. It is a test of the boundary between regulatory control and corporate ownership. The Electricity Act gives NERC significant powers to intervene in the management of a distressed electricity licensee. However, removing the board does not, by itself, make NERC the owner of KAEDC or extinguish the proprietary interests of its shareholders and creditors.

If the intervention succeeds and KAEDC is returned to a viable position, NERC’s role may remain one of temporary regulatory control. If it does not succeed, section 75(4) of the Electricity Act creates a potential route towards licence revocation and the statutory sale of the undertaking. This is where the balance between regulatory intervention, shareholder ownership and creditor rights becomes most significant.

TAXATION OF VIRTUAL ASSETS IN NIGERIA

August 7, 2026/in Pavestones Newsletters /by Pavestones Legal

SEUN TIMI-KOLEOLU & PROMISE ITAH

Introduction

On July 31, 2026, the Nigeria Revenue Service (NRS) issued the Guidelines on the Taxation of Virtual Assets (the “Guidelines”), providing the first comprehensive administrative framework for the taxation of virtual asset transactions in Nigeria.

While the Guidelines do not introduce new taxes, they clarify how existing tax laws apply to virtual assets and establish new compliance obligations for taxpayers, Virtual Asset Service Providers (VASPs) and certain peer-to-peer (P2P) marketplace operators.

This newsletter highlights the key provisions of the Guidelines and their implications for businesses operating within Nigeria’s digital asset ecosystem.

Who and What Are Covered by the Guidelines?

The Guidelines apply to persons and entities who acquire, dispose of, exchange or otherwise deal in virtual assets; receive income or payments in virtual assets; operate as VASPs or P2P marketplace operators; derive taxable income, profits or gains from virtual assets; or provide virtual asset-related services. They cover a broad range of activities, including cryptocurrencies, stablecoins, non-fungible tokens (NFTs), tokenised assets, DeFi transactions, staking, mining, airdrops and token swaps.

What transactions are taxable?

A tax liability generally arises where a virtual asset is disposed of or income is earned from a virtual asset activity. Common taxable transactions include:

selling a virtual asset;
exchanging one virtual asset for another;
receiving staking or mining rewards;
earning rewards from DeFi activities;
selling NFTs;
receiving virtual assets as payment for goods or services; and
other transactions that result in taxable income or gains.

Depending on the nature of the transaction, the applicable taxes may include income tax, withholding tax, value added tax (VAT) and stamp duty.

What transactions are not taxable?

The Guidelines clarify that not every transaction involving a virtual asset gives rise to a tax liability. Generally, the following are not treated as taxable events:

holding a virtual asset without disposing of it;
transferring virtual assets between wallets owned by the same person;
locking up virtual assets for staking;
creating or minting NFTs;
tokenising real-world asset without a change in beneficial ownership; and
using virtual assets as collateral for a loan.

The Guidelines also clarify that the transfer of a virtual asset is generally not subject to VAT. Instead, VAT applies to taxable services provided by VASPs, such as exchange, brokerage and transaction facilitation services. In addition, the Guidelines do not apply to the eNaira or other Central Bank Digital Currencies (CBDCs).

How Are Taxable Gains Computed?

The Guidelines introduce a new method for calculating gains from the disposal of virtual assets. Under this method, the purchase price and sale price are first converted into United States Dollars (USD) using the applicable exchange rates on the dates the asset was acquired and sold. The gain is then calculated in USD before being converted back into naira for tax purposes.

This approach is designed to ensure that taxpayers are taxed on their actual investment gains rather than gains arising solely from changes in the exchange rate.

How Will Virtual Asset Taxes Be Collected?

The Guidelines establish a structured framework for collecting taxes on virtual asset transactions, with responsibility shared between taxpayers and intermediaries such as VASPs and P2P marketplace operators. While taxpayers remain responsible for filing their annual tax returns and paying any outstanding tax, these intermediaries are required to deduct and remit certain taxes on behalf of users where applicable. The Guidelines also clarify that income earned from virtual asset activities, such as staking rewards, mining rewards, DeFi yields and virtual assets received as payment for goods or services, is generally taxable when received.

What Does Token-Native Tax Remittance Mean?

The Guidelines introduce a token-native tax remittance framework. Under this framework, withholding tax on qualifying virtual asset disposals and stamp duty are deducted and remitted in the same virtual asset used in the transaction, rather than first being converted into naira.

To support this framework, the NRS intends to establish a Token Treasury, which will initially accept only supported virtual assets from participating registered VASPs. Where a transaction involves an unsupported virtual asset, the Guidelines provide that it will be converted into a supported token without affecting the taxpayer’s withholding tax credit.

How Should Virtual Assets Be Valued?

The Guidelines establish valuation rules to ensure that virtual assets are valued consistently for tax purposes. Where a virtual asset is not directly priced in USD, taxpayers must use approved valuation sources to determine its fair market value and retain records to support their tax calculations. The Guidelines also prescribe how the cost of a virtual asset should be determined depending on how it was acquired, whether through a purchase, token swap, staking or mining rewards, a hard fork (where a blockchain splits and creates new tokens), or an airdrop (where free tokens are distributed by a project).

Where a taxpayer holds multiple units of the same virtual asset acquired at different times or prices, the Guidelines require a consistent method for determining the cost of the units disposed of. The default method is First-In, First-Out (FIFO), which assumes that the earliest acquired units are sold first, or the Weighted Average Cost method, which uses the average cost of all units held to calculate gains or losses. Once a method is adopted, it must be applied consistently.

Taxpayers may offset virtual asset gains and losses within the same tax year, but losses can only be applied against virtual asset gains and cannot be used to reduce other income.

What Are the Key Compliance Requirements and Penalties?

The Guidelines impose extensive compliance obligations on taxpayers, VASPs and certain P2P marketplace operators. Among other things, taxpayers engaging in virtual asset activities must register for tax purposes and obtain a Tax Identification Number (TIN), while VASPs are required to verify users’ TINs, maintain prescribed records, file statutory returns and comply with the reporting requirements under the Nigeria Tax Administration Act (NTAA).

Failure to comply with these obligations may result in significant penalties including administrative penalties imposed by the NRS.

Key Takeaways for Businesses

The Guidelines provide greater certainty on the taxation of virtual assets but also introduce significant compliance obligations. Businesses should therefore:

review how their virtual asset transactions are treated under the Guidelines;
ensure their accounting and tax systems can support the new valuation and reporting requirements;
maintain comprehensive transaction, valuation and exchange-rate records;
review arrangements with VASPs and other intermediaries to understand how tax compliance obligations will be managed; and
monitor further guidance from the NRS as the new framework is implemented.

Conclusion

The Guidelines mark a significant step in the development of Nigeria’s virtual asset tax framework by providing much-needed clarity on the taxation of digital asset transactions and the compliance obligations of taxpayers and intermediaries. While this newsletter highlights some of the key provisions of the Guidelines, it is not intended to be an exhaustive analysis of the framework.

Businesses involved in virtual asset activities should review their systems, governance and compliance processes to ensure they are prepared to meet the new reporting, withholding and record-keeping requirements and seek appropriate advice where necessary.

Archive for month: August, 2026