Nigerians will begin paying a 7.5 per cent Value Added Tax (VAT) on selected banking services, including mobile transfers and USSD transactions, from January 19, 2026, following a new government-backed regulatory directive requiring financial institutions to collect and remit the tax.
The directive, issued by the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS), mandates banks, microfinance institutions and electronic money transfer operators to begin VAT deductions on specific service charges associated with digital banking transactions.
This development came to public attention after a notice sent to customers by Moniepoint on Wednesday afternoon, informing users of the impending implementation of VAT on certain electronic banking fees. The fintech company explained that the move was in compliance with a regulatory directive from tax authorities.
“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice read. “From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS).”
According to Moniepoint, the VAT will apply to selected banking services, including electronic banking charges such as mobile transfer fees, USSD transaction charges and card issuance fees. However, the company clarified that services such as interest on deposits and savings will remain exempt from VAT.
In response to widespread public concern and misinformation, financial experts have clarified that the 7.5 per cent VAT does not apply to the amount being transferred, but strictly to the service fees charged by banks and fintech platforms.
For example, if a customer transfers ₦100,000 and the bank charges a ₦50 service fee, the VAT payable will be ₦3.75, representing 7.5 per cent of the service charge — not the transferred amount. When combined with the existing ₦50 Electronic Money Transfer Levy (EMTL), the total extra cost to the customer would be ₦103.75, while the ₦100,000 sent remains intact.
Similarly, for USSD transactions where a session fee of ₦20 applies, the VAT component will be ₦1.50, bringing the total cost to ₦21.50. Analysts describe the financial impact as minimal, noting that the tax amounts to a kobo-level increase rather than a significant deduction from users’ funds.
Moniepoint emphasised that the VAT enforcement does not represent a price increase by the company, stressing that it is legally obligated to collect and remit the tax on behalf of the government.
“This is not a price increase by Moniepoint. We are required to collect and remit VAT to the Nigerian Revenue Service,” the notice stated.
The company also disclosed that the NRS has set January 19, 2026, as the deadline for all financial institutions — including commercial banks, microfinance banks and electronic money transfer operators — to commence VAT collection and remittance.
Customers were further assured that VAT deductions would be transparently displayed, as the charges will appear separately on transaction reports and account statements.
The new VAT enforcement is expected to affect millions of Nigerians who rely daily on mobile banking platforms and USSD services for routine financial transactions. However, authorities and financial analysts maintain that the policy is a tax on digital banking services, not on personal savings or transferred funds, urging the public to remain calm and rely on verified information.
