The Federal Government has expanded the scope of value-added tax (VAT) on financial transactions, directing banks and fintech companies to begin charging and remitting a 7.5 per cent VAT on selected electronic banking services from Monday, January 19, 2026.
The directive, conveyed to customers through email notices issued by payment platforms, will affect charges on services such as mobile money transfers, USSD transactions and card issuance fees. An email sent by fintech firm Moniepoint on Wednesday confirmed the development.
“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 known as the Federal Inland Revenue Service),” the notice stated.
It clarified that the tax applies strictly to service charges, not to the amount being transferred. For instance, where a bank charges N100 as a transfer fee, VAT will be calculated on the N100 and not on the total sum sent.
“VAT will apply to certain banking services that include electronic banking charges such as mobile banking fees (transfers), USSD transaction fees, and card issuance fees,” the email added.
The Nigerian Revenue Service (NRS) has set January 19 as the compliance deadline for all commercial banks, microfinance banks and electronic money operators to begin collecting and remitting the tax. Other financial institutions are expected to issue similar notifications to their customers in the coming days.
Customers have been assured that the VAT will be transparently displayed, with the tax shown separately on transaction alerts and account statements.
However, some banking services will remain exempt. Interest earned on savings and deposits will not attract VAT, meaning customers will continue to receive returns on their accounts without tax deductions.
The latest directive follows recent adjustments in banking charges under the new Tax Act. In December, several banks notified customers of the deduction of a N50 stamp duty on electronic transfers of N10,000 and above. The charge, previously referred to as the Electronic Money Transfer Levy (EMTL), has now been formally reclassified as stamp duty and applied as a one-off fee on qualifying transactions.
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