A fresh wave of economic anxiety is sweeping across as Nigerians are set to face a 7.5% VAT on bank transfers starting on January 19, 2026.
The Federal Government, through the Nigerian Revenue Service (NRS), has directed all commercial banks and fintech platforms—including popular apps like OPay, Moniepoint, and PalmPay—to begin the strict collection and remittance of Value Added Tax on electronic service fees.
While the tax applies to the transaction charges rather than the principal amount sent, the timing has sparked a heated debate over the rising cost of digital financial services.
The directive, which officially takes effect on January 19, 2026, mandates that the 7.5% VAT be applied to mobile bank transfers, USSD session fees, and card issuance charges.
For example, if a customer is charged ₦25 for a transfer, an additional ₦1.88 will now be deducted as VAT.
The 7.5% VAT on Bank transfers was also confirmed in a notice issued by fintech operator Moniepoint to its customers on Wednesday.
In the notice, the fintech company stated that the directive is from tax authorities mandating financial institutions to begin VAT collection and remittance.
The notice read: “We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT).
“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (NRS) (formerly known as the Federal Inland Revenue Service).”
The firm disclosed that the tax will apply to “certain banking services,” including “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees, and card issuance fees.”
However, Moniepoint clarified that not all banking-related transactions would attract the tax, noting that “services that DO NOT attract VAT include: interest on deposits and savings.”
The firm also distanced itself from responsibility for the new charges, stressing that “this is not a price increase by Moniepoint.”
“Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS),” the notice read.
It further explained that the tax authority had issued a clear timeline for compliance across the financial sector.
“The NRS has communicated a deadline for January 19, 2026, for all financial institutions (commercial banks, microfinance banks, and electronic money transfer operators) to start collecting and remitting VAT,” the statement said.
Moniepoint also emphasised that the VAT would be limited strictly to service charges, stating that “VAT applies only to banking or service fees, not interest.”
Reacting to the development, President of the National Association of Telecom Subscribers of Nigeria (NATCOMS), Deolu Ogunbanjo, described the development as cruel, saying it amounts to double taxation, even multiple taxation.
“Already, consumers are paying N6.98 per session on USSD, now we are going to be charged an extra 7.5 per cent. The Federal Government should review this tax stuff, it will be a burden on bank customers and others. We are saying no to the planned 7.5 per cent VAT. They should review the entire process; if not, we shall go to court,” Ogunbanjo stated.
The development to begin charging of 7.5% VAT on bank transfers comes after the new tax laws took effect on January 1, 2026.
The tax laws signed into law in June 2025 had been generating controversy. Many people had pointed out problems with the laws including allegations of alterations.
Below are some reactions from Nigerians on the latest 7.5% VAT on bank transfers;
