REGULATION | Nigeria Revenue Service is Introducing VAT Portal Targets Fintechs – This is How Crypto On/Off-Ramps Are Affected

Nigeria’s Federal Inland Revenue Service (FIRS) has rolled out a new digital portal for Value Added Tax (VAT) collection, and it’s already shaking up the country’s fintech ecosystem — including the crypto sector.

The Simplified Compliance Regime portal is designed for suppliers of digital services, products, and platforms. While global tech companies like Meta, Netflix, and AWS are likely one of the key targets, local payment players and crypto-fiat platforms are squarely in the crosshairs.

What’s Changing?

Under the new regime:

• Non-resident suppliers earning over $25,000 annually from Nigeria must register, collect, and remit VAT.
• The FIRS now has real-time visibility into local transactions – both inbound and outbound – processed through these platforms.
• Affected businesses include digital advertising platforms, subscription services, and payment processors.

Why This Matters for Crypto

Crypto on- and off-ramps operating in Nigeria – especially those using non-resident platforms or integrated wallets – may now be required to collect and remit VAT on certain services. This includes:

• Crypto exchanges
• Wallet providers, and even
• Tokenized investment platforms

offering fiat conversions or digital goods.

For example:

• If a foreign-based crypto exchange facilitates naira-to-stablecoin purchases or remittances into Nigeria, it may now be classified as a taxable digital service.
• Off-ramps offering cash-out options via local payment providers could be exposed if they process transactions through platforms captured by the new portal.

While the Central Bank of Nigeria (CBN) regulates crypto indirectly via its banking guidelines, this move by the FIRS adds a tax compliance layer that could impact pricing, operations, and even access to certain services for Nigerian users.

Local Fintechs Also in Focus

Flutterwave, Paystack, and other local payments giants are already navigating complex tax and compliance obligations. With the FIRS gaining new digital oversight tools, service providers could face:

• Increased pressure to classify and tax digital products accurately,
• Greater scrutiny of cross-border payment flows,
• And potential complications if they facilitate access to offshore crypto platforms.

How does it work?

FIRS officials outlined their roadmap for the Transaction Monitoring System during several Zoom meetings with financial institutions. The plan involves institutions registering directly on the portal and integrating through APIs before gaining access to their dashboards.

In a standard transaction process, once a payment is received, the financial institution must first transmit the transaction details via API to the FIRS VAT Rev Assure system – a digital tool designed to ensure accurate VAT calculation and timely remittance – before the data is relayed to the main portal.

For payment service providers (PSPs) such as Paystack and Flutterwave, if VAT is not applied at the point of checkout, they are required to calculate VAT on the full transaction amount. If VAT is already included, PSPs must submit either the merchant’s VAT amount or their own, along with the relevant transaction data. All financial institutions are expected to report both the VAT amount and the gross payment total for consumer transactions.

To support this process, PSPs access a secure administrative portal to upload real-time transaction data, including VAT components for both customers and merchants. This information is then categorized and transmitted to the Transaction Monitoring System. A dedicated support channel is also available to handle refunds efficiently.

Bottom Line

The new VAT portal will likely target foreign digital service providers, but its ripple effects are set to reach deep into Nigeria’s fintech and crypto sectors. For on- and off-ramps – already balancing regulatory uncertainty with operational scale – this could mean new reporting obligations and tax liabilities.

As FIRS tightens its grip on digital transactions, crypto platforms operating in or interacting with Nigeria must start preparing for deeper tax compliance and potential enforcement.

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