Outrage as FG Directs Banks, Fintechs to Begin 7.5% VAT on Electronic, USSD Banking Services

FG has directed banks and fintechs to begin 7.5% VAT on Electronic and USSD Banking Services.

 

NewsOnline Nigeria reports that the Federal Government has directed all banks and financial technology companies to begin charging and remitting a 7.5 per cent Value Added Tax (VAT) on selected electronic banking services starting Monday, January 19, 2026.

 

The directive was disclosed through email notifications sent to customers by several payment platforms, including Moniepoint, on Wednesday.

 

Under the new rule, VAT will apply to service charges on electronic transactions such as mobile money transfers, USSD transaction fees, and card issuance fees. The tax will not apply to the amount being transferred, but only to the bank’s service charge. For instance, if a bank charges N100 for a transfer, 7.5 per cent VAT will be applied to that N100.

 

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In its notice to customers, Moniepoint stated:
“From Monday, January 19, 2026, we are required to collect a 7.5 per cent 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.”

 

The Nigerian Revenue Service (NRS) has instructed all commercial banks, microfinance banks and electronic money operators to ensure full compliance with the VAT collection and remittance requirement.

 

Moniepoint clarified that the charge does not represent a price increase but a statutory tax obligation imposed by the government. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company said.

 

Some banking services will remain exempt from the VAT, including interest earned on deposits and savings, meaning customers will not be taxed on returns from their accounts.

 

The policy is part of the government’s wider drive to standardise VAT collection on digital financial services and expand revenue in Nigeria’s rapidly growing digital economy. While VAT on banking transactions is not entirely new, the NRS is now enforcing uniform compliance across all platforms.

 

Customers have also been assured that the VAT will be clearly itemised on transaction statements and reports.

 

This comes weeks after banks began deducting a N50 stamp duty on electronic transfers of N10,000 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 applied as a one-off fee on qualifying transfers.

 

Reacting to the development, the President, National Association of Telecom Subscribers of Nigeria (NATCOMS) Chief Deolu Ogunbanjo, described the development as cruel, saying it amounts to double taxation, even multiple taxation.

 

“Already, consumers are paying ₦6.98 per session on USSD, now we are going to be charge extra 7.5 per cent. The Federal Government should review this tax stuff, it will be a burden on bank customers and others. We are saying no to the planned 7.5 per cent VAT. They should review the entire process, if not we shall go to court,” Ogunbanjo stated.