The Federal Government has issued a fresh mandate to all commercial banks, microfinance institutions, and fintech platforms to begin the collection and remittance of a 7.5% Value-Added Tax (VAT) on specific electronic banking service fees.
The new directive is set to take effect on Monday, January 19, 2026.
The Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS), said it is enforcing this uniform collection rule to standardize revenue generation within the nation’s rapidly expanding digital economy.
The tax is not applied to the actual amount of money being transferred, but rather to the service fee charged by the financial institution. For instance, a N100 transfer fee will now attract an additional N7.50 in VAT.
In an email notice sent to customers on Wednesday, the fintech firm Moniepoint broke down the new requirement:
“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (formerly known as the Federal Inland Revenue Service).”
The company further clarified which specific services would be impacted by the tax:
“VAT will apply to certain banking services that include electronic banking charges such as mobile banking fees (transfers), USSD transaction fees, and card issuance fees.”
Key Details of the Mandate
– Scope: Mobile money transfers, USSD sessions, and card issuance.
– Exemptions: Interest earned on savings and deposits remains tax-exempt.
– Transparency: Banks are required to clearly itemize the VAT charge on transaction statements so customers can track the deductions.
This enforcement follows the implementation of the new Tax Act, which has already seen banks reinstating the N50 stamp duty (formerly the Electronic Money Transfer Levy or EMTL) on electronic transfers of N10,000 and above.
While VAT on banking transactions is not a new concept, the NRS is now ensuring that fintechs and traditional banks alike adhere to the same strict remittance schedule to close revenue gaps.
Customers can expect similar notices from other major platforms and traditional banks as the January 19 deadline approaches.
