By Maryjane Austine
FG Orders VAT on Electronic Banking Charges
The Federal Government has directed banks and financial technology companies to begin collecting and remitting a 7.5 per cent value-added tax on selected electronic banking services from Monday, January 19, 2026.
The directive, communicated through notices sent to customers by payment platforms, applies to service charges on electronic transactions, not the funds being transferred. A notice issued by Moniepoint on Wednesday listed mobile money transfers, USSD transaction fees and card issuance charges among the services affected.
Under the new arrangement, VAT will be calculated on the bank’s service fee. For instance, where a customer is charged N100 for a transfer, the tax will be applied to the N100 charge rather than the transaction amount.
Moniepoint stated that it is required to collect the tax on behalf of the Nigerian Revenue Service, formerly known as the Federal Inland Revenue Service, and remit it accordingly. The company emphasised that the VAT does not represent an increase in its charges but a statutory obligation.
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Other banks and fintech operators are expected to notify their customers of the change in the coming days, as the revenue authority moves to ensure full compliance across commercial banks, microfinance banks and electronic money operators.
Certain services will remain exempt from the tax. These include interest earned on savings and deposits, meaning customers will not be taxed on returns from their accounts.
The policy forms part of broader government efforts to harmonise VAT collection on digital financial services and strengthen revenue generation within Nigeria’s expanding digital economy. While VAT on banking services is not new, authorities say the current move is aimed at enforcing uniform application across all platforms.
Customers have been assured that the VAT will be transparently displayed, with charges clearly itemised on transaction statements.
The development follows recent notifications by several banks on the deduction of a N50 stamp duty on electronic transfers of N10,000 and above, in line with provisions of the new Tax Act. The charge, previously referred to as the Electronic Money Transfer Levy, has now been formally designated as stamp duty and applies as a one-off fee on eligible transfers.
