From Victor Osula, Abuja
The Federal Government has announced that a 7.5% Value Added Tax (VAT) will be applied to certain electronic banking services, including mobile bank transfers and Unstructured Supplementary Service Data (USSD) transactions, effective from Monday, January 19, 2026.
The directive mandates all financial institutions—including commercial banks, microfinance banks, and fintech operators—to commence the collection and remittance of VAT on applicable service charges.
Fintech leader Moniepoint confirmed the move in a notice sent to customers on Wednesday, January 14, 2026, clarifying that the tax is a government requirement rather than a company-initiated price increase.
“From Monday, January 19, 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigeria Revenue Service (NRS),” the notice stated.
The NRS is the newly rebranded tax authority that replaced the Federal Inland Revenue Service (FIRS) following the passage of the Nigeria Revenue Service (Establishment) Act, 2025.
The implementation is part of broader fiscal reforms under the Nigeria Tax Act 2025, aimed at modernizing revenue collection within the digital economy.
Tax authorities clarified that the 7.5% VAT applies only to the service fees charged by the banks (such as transfer fees or USSD session fees) and not to the principal amount being sent by the customer.
For example, if a bank charges ₦25 for a transfer, the VAT will be 7.5% of that ₦25 (approximately ₦1.88), bringing the total service cost to ₦26.88.
This is distinct from the ₦50 Stamp Duty (formerly EMTL) which, as of January 1, 2026, is now paid by the sender on transactions of ₦10,000 and above.
While digital transfers and USSD services are affected, Moniepoint noted that interest on savings and deposits remains VAT-exempt.
The government has urged the public to take note of the January 19 commencement date to ensure better financial planning as the new tax regime takes full effect.
