VAT Compliance: FG Orders Banks, Fintechs to Pay Tax on Service Fees

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…VAT will be charged on electronic banking fees such as mobile money transfers, USSD transaction charges and card issuance fees.

ABUJA, NIGERIA- The iNews Times | VAT will now be charged on selected electronic banking services as the Federal Government has directed banks and fintech companies to begin collecting and remitting a 7.5 per cent value-added tax, effective Monday, January 19, 2026.

The directive was conveyed to customers through email notifications issued by payment platforms, including Moniepoint, on Wednesday. Under the new rule, VAT will be charged on electronic banking fees such as mobile money transfers, USSD transaction charges and card issuance fees.

For instance, where a bank charges ₦100 as a transfer fee, the 7.5 per cent will apply to that service charge alone, not to the amount being transferred.

In its notice, Moniepoint stated that from January 19, 2026, it is required to collect the VAT and remit it to the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service. The company explained that VAT would apply to specified banking services, including electronic transfers, USSD transactions and card-related fees.

Other financial service providers are expected to issue similar notices to their customers in the coming days. However, certain services, such as interest earned on deposits and savings, will remain VAT-exempt, meaning customers will not be taxed on returns from their accounts.

The NRS has set the compliance deadline to ensure that all commercial banks, microfinance banks and electronic money operators adhere to the collection and remittance requirement.

Moniepoint emphasised that the development does not amount to a price increase but reflects a statutory obligation, noting that it is mandated by law to collect and remit VAT to the tax authority.

The policy forms part of the government’s broader strategy to standardise VAT collection on digital financial services and boost revenue generation in Nigeria’s expanding digital economy. While VAT on banking transactions is not entirely new, the NRS is now enforcing uniform compliance across all platforms.

Customers have been assured that the VAT will be clearly itemised and displayed separately on transaction statements and reports.

Meanwhile, in December, several commercial banks notified customers of the deduction of a ₦50 stamp duty on electronic transfers of ₦10,000 and above, following the implementation of provisions in the new Tax Act. The charge, formerly known as the Electronic Money Transfer Levy (EMTL), has since been reclassified as stamp duty and is applied as a one-off fee on qualifying transactions.