The Federal Government has directed commercial banks, microfinance institutions and fintech platforms to commence the collection and remittance of a 7.5 per cent Value Added Tax (VAT) on selected electronic banking service charges with effect from Monday, January 19, 2026.
The directive applies strictly to service fees charged on electronic transactions and not to the actual amount transferred by customers.
The Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service, said the move is aimed at standardising tax collection within Nigeria’s rapidly expanding digital economy and ensuring uniform compliance across the financial services sector.
‘The Historica Nigeria‘ reports that under the directive, financial institutions are required to deduct VAT solely from the transaction service fee. For instance, a transfer charge of ₦100 will now attract an additional ₦7.50 as VAT.
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Confirming the development in a notice to customers, fintech firm Moniepoint said it would begin implementing the directive from the stipulated date. The company explained that the VAT would be remitted to the Nigerian Revenue Service in line with government regulations.
Moniepoint disclosed that the tax would apply to specific banking services, including electronic transfer charges, USSD transaction fees, mobile banking services and card issuance fees.
According to details of the directive, VAT will be charged on mobile money transfers, USSD sessions and card-related fees, while interest earned on savings and deposit accounts remains exempt.
The NRS further directed financial institutions to ensure transparency by clearly itemising VAT charges on transaction receipts and account statements to enable customers easily track deductions.
The enforcement of VAT on electronic banking service charges follows the implementation of the new Tax Act, under which banks recently reinstated the ₦50 stamp duty formerly known as the Electronic Money Transfer Levy on electronic transfers of ₦10,000 and above.
Although VAT on banking services is not entirely new, the NRS said the renewed enforcement is intended to ensure that both fintech platforms and traditional banks comply with the same remittance framework, thereby closing existing revenue gaps.
As the January 19 commencement date approaches, customers are expected to receive similar notifications from other banks and fintech platforms detailing how the VAT deductions will apply to eligible electronic banking services.