The Federal Government has mandated all banks and fintech companies to begin the collection and remittance of a 7.5 per cent value-added tax (VAT) on specific electronic banking services, starting Monday, January 19, 2026.
According to notifications sent to customers by platforms like Moniepoint, the tax will be applied to the service fees for transactions such as mobile money transfers, USSD usage, and the issuance of debit cards.
For clarity, the tax is charged on the bank’s fee rather than the actual amount being transferred; for example, a ₦100 transfer fee would attract a ₦7.50 VAT charge.
The Nigerian Revenue Service (NRS)—formerly known as the Federal Inland Revenue Service (FIRS)—is enforcing this uniform collection across all commercial and microfinance banks to standardise revenue generation from the digital economy.
Key Details of the VAT Directive
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Applicable Services: Mobile banking transfer fees, USSD transaction charges, and card issuance fees.
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Exempted Services: Interest earned on savings and deposits remains tax-free.
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Effective Date: January 19, 2026.
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Transparency: Financial institutions have assured users that the VAT will be “clearly itemised” and shown separately on all transaction statements.
In its communication, Moniepoint emphasized that this is a legal requirement rather than a price hike:“Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service… This is not a price increase but a statutory obligation.”
This development follows the implementation of the 2025 Tax Act, which also reclassified the ₦50 charge on electronic transfers of ₦10,000 and above (previously the Electronic Money Transfer Levy) as a formal stamp duty.
While the government views this as a move to standardise digital tax collection, some stakeholders have expressed concerns. Deolu Ogunbanjo, President of the National Association of Telecom Subscribers (NATCOMS), described the move as a significant burden on consumers, stating:“Already, consumers are paying ₦6.98 per session on USSD, now we are going to be charged extra 7.5 per cent… It will be a burden on bank customers and others.”
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