The Federal Government will enforce a 7.5% VAT on electronic banking services from January 19, affecting transfers, USSD fees and card issuance
The Federal Government has directed all banks and financial technology companies to collect and remit a 7.5 per cent value added tax on certain electronic banking services from Monday, January 19, 2026.
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The directive was communicated through email notices issued by payment platforms, including Moniepoint, and shared with customers on Wednesday.
Under the new rule, the 7.5% VAT electronic banking services charge will apply to fees on mobile money transfers, USSD transactions and card issuance.
The tax will be charged on the service fee, not on the amount transferred.
Moniepoint explained that if a bank charges 100 naira for a transfer, VAT will apply only to that charge. The transferred funds will remain unaffected.
In its notice, Moniepoint said it is required to collect the tax and remit it to the Nigerian Revenue Service, formerly known as the Federal Inland Revenue Service.
The company stressed that the development does not represent a price increase. It described the VAT collection as a statutory obligation imposed by government.
Other banks and fintech operators are expected to issue similar notices in the coming days as the enforcement date approaches.
Certain services will remain exempt from the tax. These include interest earned on savings and deposits, meaning customers will not pay VAT on account returns.
The Nigerian Revenue Service has set a compliance deadline for commercial banks, microfinance banks and electronic money operators to implement the directive fully.
Customers have been assured that VAT deductions will be transparent. The tax will be itemised separately on transaction statements and reports.
The move forms part of the government’s broader effort to standardise VAT collection across digital financial services and boost revenue from Nigeria’s expanding digital economy.
Although VAT on banking transactions already exists, authorities say enforcement has been uneven. The new directive seeks to ensure uniform compliance across all platforms.
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In December, banks also began deducting a 50 naira stamp duty on electronic transfers of 10,000 naira and above. The charge, previously known as the EMTL, was reclassified under the new Tax Act.
