The Federal Government has instructed banks and financial technology companies to begin charging and remitting a 7.5 per cent value-added tax (VAT) on selected electronic banking services starting Monday, January 19, 2026.
The directive, communicated to customers through email notifications from payment platforms, states that the VAT will apply to service charges on digital transactions such as mobile money transfers, USSD fees, and card issuance costs. One such notice, issued on Wednesday by Moniepoint, explained how the tax will be applied.
Under the new arrangement, the VAT will be charged only on the service fee and not on the amount being transferred. For instance, if a bank imposes a N100 transfer fee, the 7.5 per cent VAT will be calculated on that N100 charge.
According to the notice, all affected institutions are mandated to collect the tax on behalf of the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service, and remit it accordingly. Other banks and fintech operators are expected to send similar notifications to their customers in the coming days.
Certain services will remain exempt from the VAT, including interest earned on savings and deposit accounts, meaning customers will not be taxed on returns from their funds.
The NRS has set a firm deadline for compliance, requiring all commercial banks, microfinance institutions, and electronic money operators to fully implement the VAT collection and remittance process.
Moniepoint clarified that the VAT implementation does not represent an increase in service charges but is a statutory requirement mandated by law. The company noted that it is obligated to collect and forward the tax to the revenue authority.
The policy forms part of the Federal Government’s wider strategy to harmonise VAT collection across digital financial services and boost revenue in Nigeria’s expanding digital economy. While VAT on banking services is not entirely new, authorities are now enforcing uniform application across all platforms.
Customers have been assured that the VAT will be clearly displayed as a separate line item on transaction statements and reports.
Meanwhile, in December, several banks notified customers of the deduction of a N50 stamp duty on electronic transfers of N10,000 and above, following the implementation of provisions in the new Tax Act. The charge, previously referred to as the Electronic Money Transfer Levy (EMTL), has since been formally reclassified as stamp duty and will apply as a one-time fee on qualifying transactions.
