The federal government has directed banks and financial technology firms to begin collecting and remitting a 7.5 percent value-added tax (VAT) on selected electronic banking services and bank charges, effective Monday, January 19, 2026.
The directive, communicated to customers through email notices from payment platforms on Wednesday, January 14, applies to charges on services such as mobile money transfers, USSD transactions, and card issuance fees. Some Nigerians have already reacted, calling the policy double taxation in cases like USSD charges that already include fees.
Here are all the things you should know about the new 7.5% VAT charge on mobile transfers and PoS (Point-of-Sale) transaction fees in Nigeria.
What exactly is being taxed
The 7.5% Value Added Tax (VAT) will be added to service fees charged by banks and fintechs for digital transactions like mobile transfers, USSD transactions, PoS transactions, and some other banking charges.
It’s on the service fee, not the amount sent
The VAT applies only to the service fee (e.g., the bank’s charge for making a transfer), not the principal amount you send or withdraw. For example, if a bank charges ₦100 for a transfer, the 7.5% VAT (₦7.50) is added to that fee, not deducted from the money you send.
Who must collect and remit the VAT?
All banks and fintech companies are required to collect this VAT from customers and remit it to the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service.
It’s part of enforcing existing tax rules
According to the NRS, VAT has always applied to banking service fees under Nigeria’s tax laws—what’s new is uniform enforcement and clearer collection requirements, not necessarily a new tax being invented.
Not all banking charges are taxed
Exempt items include:
Interest earned on savings or deposit accounts
Other non-fee components that aren’t classified as service fees
This means you won’t pay VAT on your account interest or the actual funds you transfer.
Potential impact on daily users
Even though the VAT amount per transaction may seem small, it can add up if you make frequent transfers or PoS payments.