The Federal Government has announced a new directive requiring banks, microfinance institutions, and fintech companies to begin charging Value-Added Tax (VAT) on selected electronic banking service fees.
The policy, which takes effect from Monday, January 19, 2026, targets service charges linked to electronic transactions rather than the actual funds being transferred. Customers will therefore pay VAT only on the fees charged by financial institutions, not on the transaction amounts themselves.
According to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS), the move is aimed at harmonising tax collection across Nigeria’s rapidly expanding digital finance ecosystem.
Under the directive, financial institutions must deduct a 7.5 per cent VAT from applicable service fees. For instance, a ₦100 transfer charge will now attract an additional ₦7.50 as VAT.
Moniepoint Leading The Charge
One of Nigeria’s leading fintech companies, Moniepoint, has already notified customers of the change through an official email. The firm confirmed that it would begin collecting the tax in line with the government’s directive and remitting it to the NRS.
“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, which will be remitted to the Nigerian Revenue Service,” Moniepoint stated.
The company also clarified the types of services that will be affected. These include electronic banking-related charges such as mobile app transfer fees, USSD transaction costs, and card issuance fees.
Further details from the NRS show that VAT will apply to mobile money transfers, USSD sessions, and card-related services. However, income earned from savings and deposit accounts remains exempt from VAT.
To promote transparency, the tax authority has instructed financial institutions to clearly display VAT deductions on transaction receipts and account statements, allowing customers to easily identify the charges.
This development follows the recent reintroduction of the ₦50 stamp duty—also known as the Electronic Money Transfer Levy—on electronic transfers of ₦10,000 and above, implemented under the new Tax Act.
While VAT on certain banking services has existed in the past, the NRS says the renewed enforcement is designed to ensure uniform compliance across both fintech platforms and traditional banks, closing loopholes that have led to revenue losses.
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As the implementation date draws closer, customers are expected to receive similar notifications from other banks and fintech providers, detailing how the VAT will apply to their electronic banking transactions.