The Federal Government has directed all banks and fintech companies to begin collecting and remitting a 7.5% Value Added Tax (VAT) on selected electronic banking services, effective Monday, January 19, 2026, according to email notices issued by payment platforms.
From monitoring regulatory circulars, fintech compliance updates, and customer notifications, the directive represents a coordinated enforcement phase rather than the introduction of a new tax.
Services Affected by the VAT
According to an email notice shared with customers by Moniepoint on Wednesday, the VAT will apply to electronic banking charges, including:
- Mobile money transfer fees
- USSD transaction fees
- Card issuance fees
Importantly, the VAT will be charged only on the service fee, not on the actual amount being transferred.
For example, if a bank charges ₦100 to process a transfer, the 7.5% VAT will be applied to that ₦100 charge — not to the money sent.
What Banks Told Customers
In its notice to customers, Moniepoint explained the directive as follows:
“From Monday, January 19, 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (formerly known as the Federal Inland Revenue Service).
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.”
Other banks and fintech operators are expected to issue similar notices in the coming days as the compliance deadline approaches.
Services Exempted From VAT
Some banking services will remain exempt from VAT under the directive.
These include interest earned on deposits and savings, meaning customers will not be taxed on returns from their savings accounts.
Not a Price Increase — Fintechs Clarify
Moniepoint stressed that the VAT implementation does not amount to a price increase but a statutory obligation imposed by law.
“Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company said.
Based on experience covering Nigeria’s financial services sector and reviewing VAT compliance frameworks, the move aligns with the government’s broader effort to standardise VAT collection across digital financial services.
Why the Government Is Enforcing It Now
The directive forms part of a wider push to expand revenue generation amid Nigeria’s rapidly growing digital economy.
While VAT on banking transactions is not entirely new, the Nigeria Revenue Service (NRS) is now enforcing uniform collection rules across all banks and fintech platforms to ensure full compliance.
Customers have also been assured that the VAT will be clearly itemised, with the tax shown separately on transaction statements and reports for transparency.
Stamp Duty on Transfers Still Applies
In December, several commercial banks had already informed customers that a ₦50 stamp duty would be deducted on electronic transfers of ₦10,000 and above, following the implementation of provisions in the new Tax Act.
The charge, previously known as the Electronic Money Transfer Levy (EMTL), has now been formally reclassified as stamp duty and is applied as a one-off fee on qualifying electronic transfers.
Reporting Note
This report was compiled using customer email notices, fintech compliance alerts, regulatory circular tracking, and transaction-fee analysis to explain how the VAT applies in practice.
