The cost of managing money digitally in Nigeria is set to rise significantly in 2026, following the introduction of new federal government taxes and the clarification of existing levies. Everyday banking customers and businesses will need to budget for additional charges on common transactions like mobile transfers and USSD payments.
Breaking Down the New 7.5% VAT on Digital Services
Effective from January 19, 2026, the Federal Government has implemented a 7.5% Value Added Tax (VAT) on specific electronic banking service fees. This tax is not applied to the total amount sent but specifically to the service fee charged by the bank or fintech platform.
The VAT impacts charges for services such as mobile bank transfer fees, USSD transaction fees, and card issuance fees. For instance, if your bank charges ₦25 for a transfer, you will now pay an additional 7.5% of that fee (approximately ₦1.88) as VAT, making the total cost around ₦26.88. Financial institutions are responsible for collecting this tax and remitting it to the Nigerian Revenue Service (NRS).
It is important to note that this 7.5% VAT does not apply to interest earned on savings or deposits, nor to some other account-related services.
The ₦50 Stamp Duty on Larger Electronic Transfers
Another significant change that took effect on January 1, 2026, is the introduction of a flat ₦50 stamp duty on electronic transfers of ₦10,000 and above. This charge applies irrespective of the bank or digital platform used and replaces the previous Electronic Money Transfer Levy (EMTL) for such larger transactions.
Key details about this duty include its application only when sending ₦10,000 or more. Certain transactions are exempt, including salary payments and transfers within the same bank. This is a one-off charge per qualifying transaction and is levied on top of the regular transfer fees imposed by your bank.
Existing Bank Fees and the New VAT Impact
Beyond the new taxes, traditional bank service charges remain in effect. These include varying transfer fees, USSD session charges, debit card issuance or maintenance fees, and monthly account maintenance fees. The cost of these services differs widely across financial institutions and account types.
Under the new regime, many of these standard service fees may now also attract the 7.5% VAT, depending on their classification as taxable banking services. This extends to common charges like fees for electronic SMS alerts and card-related costs, potentially increasing their overall price.
While reforms in 2025 removed some previous charges—such as the old EMTL on transfers below ₦10,000 and stamp duty on salary payments—the new VAT and the ₦50 stamp duty collectively mean that the overall expense of frequent digital transactions is climbing.
The bottom line for Nigerian consumers and businesses is clear: digital banking will be more expensive in 2026. Regular activities like sending money, paying bills, and using USSD banking will incur higher cumulative costs due to these policy changes. Being aware of these updated charges is crucial for effective financial planning and avoiding unexpected deductions on monthly bank statements.
