KEY POINTS
- VAT on electronic banking services starts January 19.
- Tax applies to banking service fees, not transfer amounts.
- Government targets uniform compliance across banks and fintechs.
Nigeria’s Federal Government has directed banks and financial technology firms to begin collecting and remitting value-added tax on select electronic banking services, expanding enforcement of tax rules across the country’s fast growing digital payments sector.
From Monday, January 19, 2026, a 7.5 percent VAT will apply to service charges on transactions such as mobile transfers, USSD payments and card issuance, according to notices sent to customers by payment platforms. The tax applies only to the service fee that banks or fintechs charge, not to the value of the funds transferred.
Moniepoint, one of Nigeria’s largest digital banking operators, confirmed the change in an email to customers on Wednesday, saying regulators directed the company to collect the tax and remit it to the Nigerian Revenue Service, formerly the Federal Inland Revenue Service.
VAT on electronic banking services takes effect
Under the new enforcement, a N100 transfer fee, for example, will attract a VAT charge of N7.50. Interest earned on savings and deposits remains exempt, meaning customers will not pay VAT on account returns.
Moniepoint said in its notice, ‘This is not a price increase. We must collect and remit VAT to the Nigerian Revenue Service as required by law.’ Other banks and fintechs are expected to notify customers similarly before the implementation date.
The NRS has set January 19 as the deadline for compliance by commercial banks, microfinance institutions and electronic money operators, signalling a coordinated push to standardise VAT collection across digital financial platforms.
VAT on electronic banking services broadens tax net
The move forms part of the government’s wider effort to expand non-oil revenue and close gaps in tax compliance as digital payments replace cash transactions. While VAT on some banking services has existed in policy, enforcement has been uneven. Regulators are now seeking uniform application across the sector.
Customers have further been assured that VAT charges will be transparently displayed, with the tax itemised separately on transaction statements and reports. The directive follows other recent tax related changes affecting electronic payments. In December, several banks notified customers that a N50 stamp duty would apply to electronic transfers of N10,000 and above, in line with provisions of the new Tax Act.
The charge, previously referred to as the Electronic Money Transfer Levy, has been formally reclassified as stamp duty and applies as a one-off fee per qualifying transaction. Together, the measures underscore a tightening fiscal framework around Nigeria’s digital financial ecosystem.
