Millions of Nigerians who rely on mobile banking and USSD codes for daily transactions will face a new financial levy starting next year. The federal government, through the Nigerian Revenue Service (NRS), has mandated a 7.5% Value Added Tax (VAT) on selected digital banking services, effective from January 2026.
Fintech Firm Moniepoint Issues Customer Alert
Leading fintech operator Moniepoint has formally notified its customers of the impending change. In a detailed notice, the company clarified that the directive originates from the country's tax authorities and applies uniformly across the entire financial sector. According to the notice, all financial institutions are now legally required to collect and remit the 7.5% VAT on specific services to the NRS, which was formerly known as the Federal Inland Revenue Service (FIRS).
The collection is set to begin on Monday, January 19, 2026, following a firm deadline set by the tax authority for all commercial banks, microfinance banks, and electronic money operators.
Which Services Are Affected by the New VAT?
Moniepoint has specified that the tax will apply strictly to certain service charges, not all banking activities. The affected services include:
- Mobile bank transfer charges
- Fees for Unstructured Supplementary Service Data (USSD) transactions
- Card issuance fees
The company was quick to stress that this is not a price increase initiated by Moniepoint, but a legal obligation to collect tax for the government. It also emphasized that deductions will be transparent, with VAT charges clearly itemized and shown separately on customer transaction reports and account statements.
Importantly, the firm noted that not all transactions will attract the levy. For instance, interest earned on savings and deposits will remain exempt from VAT under the new directive.
Consumer Backlash and Warnings of Multiple Taxation
The policy has immediately drawn sharp criticism from consumer advocacy groups, who label it as an additional burden on citizens already grappling with various levies. The President of the National Association of Telecom Subscribers of Nigeria (NATCOMS), Deolu Ogunbanjo, described the move as "cruel and burdensome."
Ogunbanjo argued that subscribers are already paying ₦6.98 per USSD session, and adding a 7.5% VAT on top constitutes double or multiple taxation on the same service. He warned that the policy would place more financial pressure on Nigerians, especially small traders and rural users who heavily depend on USSD banking. NATCOMS has threatened legal action if the federal government does not urgently review the policy.
This development follows the recent reintroduction of the N50 Stamp Duty, also known as the Electronic Money Transfer Levy (EMTL), which is paid by the sender on electronic transfers of N10,000 and above. Experts contend that the combined effect of these charges places too much burden on ordinary Nigerians and could discourage the use of formal digital financial services.
Widespread Impact on Nigeria's Digital Economy
Given that mobile banking and USSD services form the backbone of everyday transactions for a vast population, the enforcement of this VAT is expected to have significant economic and social implications. It will affect millions, particularly those without access to smartphones or conventional internet banking.
As the January 2026 compliance deadline approaches, other banks and fintech companies are expected to issue similar notices to their customers, formalizing the additional cost of conducting digital financial transactions in Nigeria.
