BREAKING : Nigerians to Pay 7.5% VAT on Mobile Transfers, USSD & Card Fees From January 19

 Nigerians to Pay 7.5% VAT on Mobile Transfers, USSD & Card Fees From January 19 Nigerians using electronic banking services will soon f...

 Nigerians to Pay 7.5% VAT on Mobile Transfers, USSD & Card Fees From January 19

Nigerians using electronic banking services will soon face an additional 7.5% Value Added Tax (VAT) on certain fees, following a government directive enforced by the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS).

The change, set to take effect from Monday, January 19, 2026, requires financial institutions—including commercial banks, microfinance banks, and electronic money transfer operators—to collect and remit the VAT on applicable service charges. This follows recent tax reforms under the Nigeria Tax Act, 2025, and related legislation signed into law in 2025, which restructured revenue administration and broadened compliance requirements.

The announcement gained public attention after fintech platform Moniepoint sent notifications to customers detailing the upcoming change. In the message, Moniepoint explained that the VAT applies specifically to fees for services such as:

- Electronic banking charges, including mobile banking fees for transfers

- USSD (Unstructured Supplementary Service Data) transaction fees

- Card issuance fees

The tax is levied only on the service fee itself—not on the transferred amount. For example, if a transfer incurs a ₦100 fee, the additional VAT would be ₦7.50, making the total deduction ₦107.50 (plus any other applicable charges).

Notably, certain banking elements remain exempt, including interest earned on deposits and savings accounts, which will not attract the VAT.

Moniepoint emphasized in its communication that this is not a price increase initiated by the company but a mandatory regulatory requirement. "Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS)," the notice stated. It added that the NRS has set January 19, 2026, as the uniform compliance deadline across the financial sector to ensure consistent implementation.

This development is part of broader efforts by the Federal Government to standardize VAT collection on digital and financial services, aligning with the expansion of Nigeria's digital economy and recent tax reforms aimed at improving revenue generation and compliance.

The policy has sparked mixed reactions, with some consumer advocates expressing concerns over the added burden on everyday transactions—particularly for low-income users who rely heavily on USSD and mobile banking for basic financial needs. Critics argue it could compound existing charges, such as session-based fees for USSD access.

However, authorities and financial institutions frame it as a necessary step toward equitable taxation in the growing fintech space, with transparency assured through itemized deductions on statements.

As the effective date approaches, customers are advised to review their transaction habits and statements. Other banks and fintech operators are expected to issue similar notifications in the coming days.

This move comes shortly after other fiscal adjustments, including the reintroduction of stamp duty on certain electronic transfers starting January 1, 2026, under updated tax provisions. Nigerians are encouraged to stay informed through official channels from the NRS and their financial providers.

Family Writers Press International.