Tax Reform: Five Banking Transactions That Will Attract 7.5% VAT in Nigeria

Nigerians will begin paying 7.5% Value Added Tax (VAT) on selected banking service charges from January 19, 2026, following a directive from the Nigerian Revenue Service (NRS).

This development affects digital and electronic banking fees collected by banks and fintech platforms nationwide.

Under the new rule, VAT will be applied only to service fees charged by financial institutions, not on the principal amounts being transferred or withdrawn. The tax must be collected by banks, microfinance institutions, and electronic money operators and remitted to the NRS.

Banking Transactions Now Subject to 7.5% VAT

• Mobile banking transfer fees (e.g., charges on money transfers)
• USSD transaction fees (charges for short code banking sessions)
• Card issuance fees (costs to issue debit or other cards)
• POS transaction fees (charges for point-of-sale payments)
• Loan processing and documentation fees (where applicable)

The tax directive was communicated to customers via email notices from payment platforms such as Moniepoint, which clarified that this is not a price increase by the companies themselves, but a statutory requirement to collect and remit VAT under the new guidelines.

Services that do not attract VAT include interest on deposits or savings, meaning customers will not pay the tax on returns from their bank accounts.

Financial institutions are expected to clearly itemise the VAT charges on transaction receipts and bank statements so users can see the tax applied separately.

This move is part of broader tax reform efforts to expand revenue sources and standardise VAT collection across digital financial services in Nigeria’s growing digital economy.