FG Directs Banks and Fintechs to Remit VAT on Service Charges

The Federal Government has instructed all banks and fintech operators to collect and remit 7.5 per cent value-added tax (VAT) on selected electronic banking services, effective Monday, January 19, 2026, according to email notifications shared by payment platforms.

The VAT will apply to service charges such as mobile money transfers, USSD transaction fees, and card issuance fees. For instance, a N100 transfer fee will attract a 7.5 per cent VAT on the fee itself, not the amount being sent.

“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service. This applies to certain banking services including mobile banking fees, USSD transaction charges, and card issuance fees,” stated an email sent to customers by Moniepoint.

Other banks and fintechs are expected to issue similar notifications to their customers. Exempt services include interest earned on deposits and savings, meaning tax will not apply to returns on customer accounts. The Nigerian Revenue Service (NRS) has set deadlines to ensure full compliance by commercial banks, microfinance banks, and electronic money operators.

Moniepoint emphasised that the VAT collection is a statutory requirement, not a price increase. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company said.

The move is part of government efforts to standardise VAT collection on digital financial services and enhance revenue generation amid Nigeria’s growing digital economy. VAT on banking transactions is not entirely new, but the NRS is now enforcing uniform collection rules across all platforms. Customers are assured that the VAT will be clearly itemised on transaction statements.

Separately, commercial banks recently informed customers that a N50 stamp duty will be applied on electronic transfers of N10,000 and above, following the new Tax Act provisions. The fee, previously referred to as EMTL, has now been reclassified as stamp duty and applies as a one-off charge on qualifying electronic transfers.