By John Umeh
The Federal Government has instructed banks and financial technology companies to begin charging and remitting Value Added Tax (VAT) on selected electronic banking services, with implementation set to commence on Monday, January 19, 2026.
The directive, conveyed to operators through official notices circulated by payment platforms, requires a 7.5 per cent VAT to be applied to service-related charges on digital transactions. These include fees for mobile and online transfers, USSD transactions, and card issuance.
Customers were informed of the development through emails from fintech operators such as Moniepoint, which clarified that the tax will be calculated strictly on service fees, not on the amount being transferred. For instance, where a bank charges ₦100 as a transfer fee, VAT will be applied to that ₦100 only.
According to the notice, the collected tax will be remitted to the Nigerian Revenue Service (NRS), the agency formerly known as the Federal Inland Revenue Service (FIRS). The NRS has directed all commercial banks, microfinance institutions, and electronic money operators to fully comply with the new collection and remittance framework.
Operators emphasised that the VAT deduction does not represent a hike in service charges but reflects a statutory requirement. Moniepoint stated that it is legally obligated to collect and forward the tax on behalf of the government.
Certain banking services will remain exempt from VAT, including interest earned on savings and deposit accounts. Customers will therefore not be taxed on returns from their deposits.
The government says the move is part of a wider effort to harmonise VAT administration in the fast-expanding digital finance space and improve revenue mobilisation. While VAT on banking services has existed in principle, authorities are now enforcing consistent application across all digital financial platforms.
To promote transparency, customers have been assured that VAT deductions will be clearly displayed as separate line items on transaction receipts and account statements.
The directive follows a recent notification by several banks in December regarding the deduction of ₦50 stamp duty on electronic transfers of ₦10,000 and above, in line with provisions of the new Tax Act. That charge, previously referred to as the Electronic Money Transfer Levy (EMTL), has now been formally designated as stamp duty and applied as a one-time fee on eligible transactions.
