FG Orders Banks, Fintechs to Begin 7.5% VAT on Electronic Banking Services from Jan 19

FG Orders Banks, Fintechs to Begin 7.5% VAT on Electronic Banking Services from Jan 19

The Federal Government under President Bola Tinubu has directed all banks and fintech companies to begin the collection and remittance of 7.5 per cent Value-Added Tax (VAT) on selected electronic banking services, effective Monday, January 19, 2026.

The directive was communicated to customers through email notices issued by payment platforms, including Moniepoint, which confirmed that the VAT would be charged on applicable service fees and remitted to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS).

According to the notice, the VAT will apply to electronic banking charges such as mobile money transfers, USSD transaction fees, and card issuance fees. The tax will be calculated on the service charge, not on the amount being transferred.

“For instance, if a bank charges ₦100 as a transfer fee, the 7.5% VAT will be applied to that ₦100 and not the funds sent,” the notice clarified.

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“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT to be remitted to the Nigerian Revenue Service,” Moniepoint stated, stressing that the move is a statutory obligation, not a price increase.

The platform also assured customers that interest earned on savings and deposits remains VAT-exempt, meaning account returns will not be taxed.

The NRS has reportedly given a compliance deadline to commercial banks, microfinance banks and electronic money operators, mandating uniform VAT collection across the sector as part of efforts to strengthen tax compliance in Nigeria’s digital economy.

Industry players noted that VAT on banking services is not entirely new, but the latest directive enforces standardised and sector-wide implementation.

Customers were further informed that VAT charges will be clearly itemised on transaction receipts and account statements for transparency.

Meanwhile, the development comes on the heels of earlier notifications by banks in December regarding the deduction of a ₦50 stamp duty on electronic transfers of ₦10,000 and above, following provisions of the new Tax Act. The levy, previously known as Electronic Money Transfer Levy (EMTL), has now been formally classified as stamp duty and applied as a one-time charge per eligible transaction.

FG Orders Banks, Fintechs to Begin 7.5% VAT on Electronic Banking Services from Jan 19