VAT on banking service fees will now apply to certain electronic financial transactions as the Federal Government directs banks and fintech companies to collect and remit a 7.5% tax.
The new requirement takes effect Monday, January 19, 2026. It covers electronic banking charges such as mobile money transfers, USSD transaction fees, and card issuance fees. For example, a N100 transfer fee will incur N7.50 VAT, with the tax applied only to the service fee, not the money being sent.
Moniepoint, a leading payment platform, informed its customers of the directive via email on Wednesday. The company stressed that the move is a statutory obligation, not a price increase. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the statement said. Other operators are expected to issue similar notices in the coming days.
Exemptions include interest earned on deposits and savings, ensuring that returns on accounts remain untaxed. The NRS has set strict compliance deadlines for all commercial banks, microfinance banks, and electronic money operators. The aim is to standardise VAT collection across Nigeria’s growing digital economy and improve government revenue.
The government previously began enforcing a one-off N50 stamp duty on electronic transfers of N10,000 and above, under the new Tax Act, which reclassified the former electronic money transfer levy (EMTL). Customers can expect the VAT to appear separately on transaction statements, ensuring transparency.
Officials say the policy reflects efforts to harmonise digital finance taxation and strengthen compliance across all platforms while avoiding duplication of charges on banking services.
