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

By Vincent Afolabi

15 January 2026

Business

Nigerians will start paying a 7.5 percent Value Added Tax (VAT) on selected banking services from January 19, 2026, following a regulatory directive requiring financial institutions to collect and remit the tax on applicable service charges.

The development became public after customers of Moniepoint received a notification on Wednesday afternoon outlining changes to charges on some electronic banking transactions.

In the notice obtained by DailyTimes the fintech firm said the VAT implementation was based on instructions from tax authorities directing banks and payment service providers to begin enforcement.

“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice stated.

It added: “From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS) (formerly known as the Federal Inland Revenue Service).”

Moniepoint explained that the tax would apply to “certain banking services,” specifically listing “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”

The company, however, clarified that the VAT would not apply across all banking activities. According to the notice, “services that DO NOT attract VAT include: interest on deposits and savings.”

Moniepoint also sought to distance itself from the new deductions, stressing that the charges were not initiated by the company.

“This is not a price increase by Moniepoint,” the notice read. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS).”

The firm further explained that the tax authority had communicated a clear deadline for sector-wide compliance.

“The NRS has communicated a deadline for 19th January 2026 for all financial institutions (commercial banks, microfinance banks and electronic money transfer operators) to start collecting and remitting VAT,” the statement said.

To address transparency concerns, Moniepoint assured customers that the tax would apply strictly to service fees and would be clearly displayed.

“VAT applies only to banking or service fees, not interest,” the company stated, adding that “VAT charge will appear separately on your transaction reports and statements.”

The enforcement of VAT on electronic banking charges is expected to affect millions of Nigerians who rely daily on mobile banking apps and USSD platforms for routine financial transactions, especially in areas with limited access to physical bank branches.