DEVELOPMENT
Federal Government Enforces 7.5% VAT on Mobile Transfers, USSD and Other Electronic Banking Charges from January 19, 2026, as Banks Begin Mandatory Tax Collection Nationwide
Nigerians will, from January 19, 2026, begin paying a 7.5 percent Value Added Tax (VAT) on selected banking services, including mobile bank transfers and USSD transactions, following a new regulatory directive backed by the Federal Government.
The development was disclosed in a customer notice issued on Wednesday by Moniepoint, alerting users to the imminent implementation of the VAT regime on specific electronic banking charges in line with instructions from tax authorities.
According to the notice, financial institutions have been mandated to commence the collection and remittance of VAT on eligible banking services, as part of the Federal Government’s efforts to strengthen tax compliance and revenue generation within the financial sector.
Part of the notice read: “We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT).
“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 VAT would apply to “certain banking services”, specifically listing “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”
However, the company clarified that the tax would not apply to all banking-related transactions. It noted that some services remain exempt under the VAT framework.
“Services that DO NOT attract VAT include: interest on deposits and savings,” the notice stated.
The fintech firm also sought to distance itself from responsibility for the new charges, stressing that the deductions are not a result of any price increase by Moniepoint, but rather a compulsory regulatory requirement imposed by tax authorities.
“This is not a price increase by Moniepoint. Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS).
“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. VAT applies only to banking or service fees, not interest,” it said.
To ensure transparency, customers were also assured that VAT deductions would be clearly reflected in their transaction records.
According to the notice, “VAT charge will appear separately on your transaction reports and statements.”
The new VAT enforcement is expected to have a wide-reaching impact, affecting millions of Nigerians who depend daily on mobile banking platforms, USSD services and digital payment channels for personal and business transactions. As the implementation date approaches, financial institutions are expected to continue sensitising customers on how the deductions will apply across eligible services.