FG Orders Banks, Fintechs to Remit 7.5% VAT on Electronic Banking Service Fees from January 19
The Federal Government has directed all banks and fintech companies operating in Nigeria to begin collecting and remitting a 7.5 per cent value-added tax (VAT) on selected electronic banking service fees, effective Monday, January 19, 2026. The directive was communicated to customers through email notices issued by payment platforms, signalling tighter enforcement of tax compliance across the digital finance sector.
According to an email sent by Moniepoint and shared with customers on Wednesday, the VAT will apply to electronic banking charges such as mobile money transfers, USSD transaction fees, and card issuance fees. The tax will be charged strictly on the service fee and not on the actual amount transferred. For instance, where a bank charges N100 for a transfer, the VAT will be applied only to that N100 fee.
Moniepoint clarified that the deduction is a statutory requirement and not an increase in service pricing. “From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service,” the company said, noting that other financial service providers are expected to issue similar notices in the coming days.
The Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service, has set a compliance deadline for all commercial banks, microfinance banks, and electronic money operators to ensure uniform VAT collection and remittance. Services exempt from the tax include interest earned on deposits and savings, meaning customers will not be taxed on returns from their accounts.
The move forms part of the government’s broader strategy to standardise VAT collection on digital financial services and boost revenue generation as Nigeria’s digital economy expands. Customers have been assured that the VAT will be clearly itemised and shown separately on transaction statements. The directive follows earlier notices from banks in December regarding the deduction of N50 stamp duty on electronic transfers of N10,000 and above under the new Tax Act, reinforcing the government’s push for stricter enforcement of transaction-related levies.
source: punch