Nigerians to pay 7.5% VAT on mobile bank transfers, USSD transactions from January 19

The Federal Government has instructed all banks and fintech companies to collect and remit a 7.5 per cent value-added tax (VAT) on specific electronic banking services starting Monday, January 19, 2026, according to email notifications circulated by payment platforms.

The VAT will cover electronic banking fees such as mobile money transfers, USSD transaction charges, and card issuance fees, the notice sent by Moniepoint to its customers on Wednesday explained. For instance, if a transfer costs N100, the 7.5 per cent VAT will apply to the service charge, not the amount being transferred.

“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (formerly Federal Inland Revenue Service),” the email stated.

“VAT will apply to selected banking services, including electronic banking charges such as mobile banking transfer fees, USSD transaction fees, and card issuance fees,” it added.

Other banks and digital financial service providers are expected to notify their customers similarly in the coming days. Services exempt from the tax include interest earned on deposits and savings accounts, meaning customers will not be taxed on returns from their accounts.

The Nigerian Revenue Service (NRS) has set a deadline to ensure compliance from all commercial banks, microfinance banks, and electronic money operators. Moniepoint emphasised that the VAT collection is a statutory requirement and not a price increase. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company noted.

This directive forms part of the government’s effort to standardise VAT collection on digital financial services and boost revenue amid Nigeria’s expanding digital economy. While VAT on banking transactions is not entirely new, the NRS is now enforcing uniform rules across all platforms to ensure sector-wide compliance.

Customers have been assured that the new tax will be clearly listed on transaction statements and reports, with the VAT shown separately.

Separately, in December, several commercial banks began deducting a N50 stamp duty on electronic transfers of N10,000 and above under the new Tax Act. Previously known as the Electronic Money Transfer Levy (EMTL), the charge has now been formally reclassified as stamp duty and applies as a one-off fee on qualifying electronic transfers.