The Federal Government has directed all commercial banks, microfinance banks and financial technology companies (fintechs) to begin collecting and remitting a 7.5 per cent Value Added Tax (VAT) on certain electronic banking service fees, officials said on Thursday, January 15, 2026.
Under the new rule, the 7.5% VAT will apply only to the service fees charged by banks and fintech platforms — such as charges for mobile money transfers, USSD transaction fees and card issuance fees — and not on the actual amount being transferred, according to notices sent to customers by payment platforms.
For example, if a bank or fintech charges ₦100 for a service fee, the VAT amount will be ₦7.50, to be paid directly to the Nigeria Revenue Service (NRS). The VAT charges will be clearly shown separately on transaction statements so customers can see them.
The directive takes effect on Monday, January 19, 2026, and financial institutions are expected to begin collecting and remitting the tax from that date. The policy forms part of broader efforts by the government to standardise VAT collection in the digital economy and increase non‑oil revenue.
Customers are assured that interest earned on savings and deposits will remain exempt from VAT, meaning no tax will be applied to their savings returns. Fintech firms, including Moniepoint, have informed users that the move is a legal requirement and not a voluntary price increase by the companies themselves.
The NRS, formerly known as the Federal Inland Revenue Service (FIRS), has set a compliance deadline for all commercial banks, microfinance banks and electronic money operators to ensure full adherence to the VAT collection and remittance requirement.
Officials said the policy reflects the government’s drive to align Nigeria’s tax system with the rapidly growing digital financial services sector and to close gaps in revenue mobilisation. The approach also aims to ensure that traditional banks and fintech firms follow the same VAT rules across the financial sector.
Next steps: As January 19 approaches, banks and fintech platforms are expected to issue further notices to customers about the VAT charges and update their systems to apply the tax and remit collections to the NRS as required.
