Nigeria will begin charging 7.5 percent VAT on mobile transfers, USSD transactions and selected electronic banking services from January 19, 2026. The tax applies only to service fees charged by banks and fintechs, not the amount transferred, and will be collected nationwide under a new government directive.
Digital Transfers Now Tax Targets
Millions of Nigerians woke up to a fresh financial shock as the Federal Government quietly moved to tax everyday digital banking. From January 19, 2026, a 7.5 percent Value Added Tax will be slapped on selected electronic banking services, turning routine transfers, USSD payments and card issuance into new revenue streams for the state. SKYTREND NEWS reports that the directive has already triggered outrage across fintech platforms and banking halls, as customers brace for higher costs on transactions they rely on daily.
What The New VAT Actually Covers
Under the new enforcement, banks and fintech companies are now required to collect and remit 7.5 percent VAT on service charges tied to electronic banking. This includes mobile app transfers, USSD transaction fees and card issuance charges. According to notices sent to customers, the tax applies strictly to the service fee charged by the bank or fintech, not the amount being transferred.
For example, if a transfer attracts a N100 service fee, VAT of N7.50 will be added to that charge. Interest earned on savings or deposits remains exempt, meaning customers will not be taxed on returns from their accounts.
Fintechs Alert Customers As Deadline Nears
The directive came to light after payment platforms began emailing customers ahead of the January 19 deadline. One such notice was issued by Moniepoint, which informed users that it is now legally required to collect and remit VAT to the tax authority.
According to SKYTREND NEWS findings, other banks and electronic money operators are expected to issue similar notices in the coming days, as the compliance window applies across commercial banks, microfinance institutions and fintech platforms nationwide.
Not A Price Hike, Government Insists
Operators have been quick to distance themselves from blame. Fintech companies insist the new deductions are not price increases but statutory obligations imposed by tax authorities. The VAT, they say, will be clearly itemised on transaction statements so customers can see exactly what is being charged.
The tax will be remitted to the Nigerian Revenue Service, formerly known as the Federal Inland Revenue Service, which has now set a firm compliance date for the entire financial sector.
Why Government Is Pushing The Tax
According to online media sources, the move is part of a broader strategy to standardise VAT collection in Nigeria’s rapidly expanding digital economy. With millions of daily transactions flowing through mobile banking and USSD platforms, tax authorities see electronic financial services as an untapped revenue base.
VAT on banking services is not entirely new, but enforcement has been uneven in the past. This directive aims to close loopholes and ensure uniform compliance across all platforms, especially as cashless transactions continue to dominate.
Stamp Duty Already Hit Customers
The VAT announcement follows closely on the heels of another deduction Nigerians are still grappling with. In December, several banks began deducting N50 stamp duty on electronic transfers of N10,000 and above, following provisions of the new Tax Act. The charge, previously called the Electronic Money Transfer Levy, has now been formally reclassified as stamp duty.
With both stamp duty and VAT now applying to digital banking services, analysts warn that transaction costs could quietly pile up for consumers who depend on frequent transfers.
Public Reaction And What Comes Next
Many Nigerians have taken to social media to express frustration, arguing that digital banking was supposed to lower costs, not become another tax net. Small business owners and low income earners who rely on USSD and mobile transfers say the policy disproportionately affects them.
According to SKYTREND NEWS gathered, financial analysts expect pushback in the coming weeks, especially if banks fail to clearly communicate the charges. However, with the January 19 deadline already set, reversal appears unlikely.
As Nigeria leans deeper into cashless transactions, one reality is becoming clear. Convenience now comes at a price, and for millions of users, digital banking just got more expensive.
