The Federal Government has moved to tighten tax collection in Nigeria’s fast-growing digital payments space, directing bank and fintech companies to begin charging 7.5 percent value-added tax (VAT) on selected electronic banking service fees from Monday, January 19, 2026.

Notices sent to customers by payment platforms, including Moniepoint, show that the tax will apply to charges on services such as mobile transfers, USSD transactions and card issuance, adding a new layer of cost to routine digital banking activities already relied on by millions of Nigerians.

The VAT will be charged on the service fee itself, not on the value of the transaction. For instance, if a bank charges ₦100 for a transfer, an additional ₦7.50 VAT will now be applied to that fee.

“From Monday, January 19, 2026, we are required to collect a 7.5 percent VAT to be remitted to the Nigerian Revenue Service,” Moniepoint said in a notice to customers. The company stressed that the charge is a statutory requirement and not a discretionary price increase.

The directive affects commercial banks, microfinance banks and electronic money operators, signalling a coordinated enforcement push by the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service, to standardise VAT collection across bank and fintech platforms.

While VAT has long applied to certain banking services, enforcement has been uneven, especially across fintech platforms. The latest move suggests the government is closing gaps in compliance as digital payments continue to replace cash transactions nationwide.

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Some services will remain exempt. Interest earned on deposits and savings accounts will not attract VAT, meaning customers will not be taxed on returns from their balances.

For consumers, the change means slightly higher costs on transactions that have become everyday tools, from quick transfers to USSD payments, rather than occasional banking activities. For the government, it represents an effort to expand non-oil revenue by capturing value from Nigeria’s rapidly expanding digital economy.

The development follows earlier cost adjustments in electronic transactions. In December, several banks notified customers that ₦50 stamp duty would be deducted on electronic transfers of ₦10,000 and above, following provisions of the new Tax Act. The charge, previously referred to as the Electronic Money Transfer Levy, was formally reclassified as stamp duty and applied as a one-off fee per qualifying transfer.

Taken together, the measures point to a broader shift in how everyday financial transactions are being taxed, as authorities look beyond traditional revenue sources and focus on the growing volume of digital payments flowing through banks and fintech platforms.

Meiza Nigeria