Nigerian financial institutions are set to implement a significant change that will affect millions of customers conducting everyday digital transactions. From Monday, January 19, 2026, banks will begin collecting a 7.5 percent Value Added Tax (VAT) on various service fees, including those for point-of-sale (POS) transactions and mobile money transfers.
What Services Will Attract the New VAT?
The directive, described as a government-endorsed regulatory change, was communicated to customers by Moniepoint Microfinance Bank. The bank clarified that the VAT will apply specifically to the fees charged for certain services, not to the principal amount of transactions or cash withdrawals.
The 7.5% tax will be levied on electronic banking charges such as:
- POS transaction fees
- Mobile banking transfer fees
- USSD transaction charges
- POS activation fees
- Card issuance fees
- Specific subscription services like Moniebook
Additionally, other service charges, including those for loan processing and documentation, will also be subject to the VAT. Moniepoint was keen to stress that this is not a price increase initiated by the bank but a mandatory tax collection on behalf of the government.
Clarifications and Exemptions
In its communication, the bank provided crucial details on how the tax will be applied and what remains exempt. A key point is that the VAT applies to the existing N50 stamp duty charge and similar fees, not the actual value of the money being sent or withdrawn.
Services that will NOT attract the new VAT include interest on loans, advances, deposits, and savings. The bank assured customers that the VAT charge will appear as a separate, distinct line item on transaction statements for transparency.
All proceeds collected from this VAT are to be remitted to the Nigerian Revenue Service (NRS), the body formerly known as the Federal Inland Revenue Service (FIRS).
Industry-Wide Deadline and Implications
This is not an isolated policy affecting only one institution. The Nigerian Revenue Service has set a uniform deadline of January 19, 2026, for all financial service providers to commence collection and remittance.
The mandate applies broadly to commercial banks, microfinance banks, and electronic money transfer operators across Nigeria. This means customers of virtually all formal financial channels should expect to see the additional charge on applicable fees starting from the stipulated date.
The VAT rate of 7.5 percent is in line with the current national tax law. This move represents a broadening of the VAT net within the rapidly growing digital financial services sector, aiming to boost government revenue from everyday economic activities.
