FG directs banks, fintechs to remit 7.5% VAT on electronic service fees

The Federal Government has directed banks and financial technology companies to begin collecting and remitting a 7.5 per cent value-added tax (VAT) on selected electronic banking services, effective Monday, January 19, 2026.

The directive was conveyed to customers through email notices issued by payment platforms, including Moniepoint, on Wednesday. According to the notice, the VAT will apply to service charges on electronic transactions such as mobile money transfers, USSD transaction fees, and card issuance fees.

The tax will be charged only on the service fee and not on the amount transferred. For instance, where a bank charges ₦100 as a transfer fee, the 7.5 per cent VAT will be applied to the ₦100, not the transferred funds.

“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (formerly the Federal Inland Revenue Service),” Moniepoint stated. The company added that the VAT covers specific banking services, including electronic transfers, USSD transactions, and card-related fees.

Other banks and fintech operators are expected to issue similar notifications to customers in the coming days. However, some services will remain exempt, including interest earned on savings and deposits, meaning customers will not be taxed on returns from their accounts.

The Nigerian Revenue Service (NRS) has set a deadline for compliance, requiring all commercial banks, microfinance banks, and electronic money operators to implement the VAT collection and remittance process.

Moniepoint clarified that the development does not amount to a price increase but reflects a statutory obligation. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company said.

The policy forms part of the Federal Government’s efforts to standardise VAT collection on digital financial services and broaden revenue sources in line with the expansion of Nigeria’s digital economy. While VAT on banking services is not entirely new, the NRS is now enforcing uniform compliance across all platforms.

Customers have been assured that the VAT will be transparently displayed, with the tax itemised separately on transaction statements and reports.

Meanwhile, in December, several commercial banks notified customers of the commencement of a ₦50 stamp duty charge on electronic transfers of ₦10,000 and above, in line with provisions of the new Tax Act. The charge, formerly referred to as the Electronic Money Transfer Levy (EMTL), has been formally reclassified as stamp duty and is applied as a one-off fee on eligible transfers.