Millions of Nigerians who depend on mobile banking and USSD services for daily transactions will soon face an additional 7.5 per cent Value Added Tax (VAT) on selected electronic banking charges, following a government directive set to take effect from January 19, 2026.
The change was announced in a customer notice issued by fintech platform Moniepoint on Wednesday, obtained by Truth Live News. The notice attributes the new tax obligation to a mandate from tax authorities requiring financial institutions to collect and remit VAT on certain services.
“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).”
According to Moniepoint, the VAT will apply to “certain banking services,” specifically “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”
The company emphasized that the tax targets service fees only and does not extend to all banking activities. “Services that DO NOT attract VAT include: interest on deposits and savings,” it clarified.
Moniepoint also stressed that the charge is not a company-initiated fee increase. “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 the compliance timeline: “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.”
To ensure transparency, Moniepoint assured customers that “VAT charge will appear separately on your transaction reports and statements.” It reiterated that “VAT applies only to banking or service fees, not interest.”
This development comes amid broader tax reforms under the Nigeria Tax Act 2025 and related legislation, which took effect from January 1, 2026, and renamed the Federal Inland Revenue Service to the Nigeria Revenue Service (NRS). While the reforms include changes like reclassifying the Electronic Money Transfer Levy (EMTL) as stamp duty (a flat ₦50 on transfers of ₦10,000 and above, now borne by senders), the 7.5% VAT on specific banking service fees appears to be a separate enforcement on taxable financial services.
The new VAT collection is expected to impact a large segment of the population, particularly those in urban and rural areas who rely heavily on mobile apps and USSD codes (*e.g., *737#, *901#*) for transfers, bill payments, and other financial needs due to limited access to traditional banking infrastructure.
Financial institutions across the sector are required to comply with the directive, potentially leading to similar notifications from other banks and fintech platforms in the coming days. Customers are advised to review their transaction statements carefully starting January 19 for the itemized VAT deductions.
