Nigerians to Begin Paying 7.5% VAT on Bank Transfers and USSD Transactions from January 19, 2026
Nigerians will soon begin paying a 7.5 percent Value Added Tax (VAT) on selected banking services such as mobile transfers and USSD transactions, starting January 19, 2026, following a fresh regulatory directive backed by the Federal Government, PulseNets learnt.
The development came to light after a customer notice issued by fintech firm Moniepoint on Wednesday, alerting users to the impending enforcement of VAT on specific electronic banking charges, PulseNets obtained.
According to the notice, the directive was issued by Nigerian tax authorities, mandating banks and financial service providers to begin the collection and remittance of VAT on eligible service fees.
Part of the notice stated:
“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT).”
It further clarified:
“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.”
Moniepoint explained that the tax would apply to certain banking services, including electronic banking charges such as mobile banking transfer fees, USSD transaction fees, and card issuance fees, PulseNets reported.
However, the company noted that the VAT would not apply across all banking transactions.
“Services that do not attract VAT include interest on deposits and savings,” the notice added.
The fintech firm also moved to distance itself from responsibility for the additional charges, stressing that the deductions were not the result of a company-led price increase.
“This is not a price increase by Moniepoint. We are required by law to collect and remit VAT to the Nigerian Revenue Service,” the company explained.
Moniepoint further disclosed that the NRS had communicated a clear compliance deadline to financial institutions nationwide.
“The NRS has set January 19, 2026, as the deadline for all financial institutions — including commercial banks, microfinance banks, and electronic money transfer operators — to begin collecting and remitting VAT. VAT applies strictly to service fees, not interest,” it said.
Customers were also assured that transparency would be maintained, as VAT deductions would be clearly reflected in transaction records.
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“The VAT charge will appear separately on your transaction reports and statements,” Moniepoint told customers, according to information available to PulseNets.
The new VAT enforcement is expected to impact millions of Nigerians who depend daily on mobile banking platforms and USSD services for routine financial transactions, further raising concerns about the rising cost of digital banking in the country.
