The Nigerian Revenue Service (NRS) has moved to clear the air on widespread confusion regarding the application of a new Value Added Tax (VAT) on banking services. The agency has clarified that the 7.5% VAT will be borne by financial institutions, not by customers conducting mobile transfers.
Official Clarification Ends Customer Anxiety
This clarification was provided by a top NRS official involved in policy discussions. The official confirmed to Legit.ng on Thursday, January 15, 2026, that the tax targets the service fees banks levy, not the principal amount of any transaction.
The official gave a clear example: "The 7.5% VAT will apply ONLY to the charges banks make on customers’ transfers and not on the value of the transaction." He illustrated that for a N10,000 transfer attracting a N50 stamp duty, the VAT would be calculated on the N50 fee. Consequently, the bank is liable for this tax payment, not the customer.
He stressed that the policy does not impose an extra tax burden on Nigerians, contrary to circulating speculations. "So, there is no imposition of additional tax burden on Nigerians as being speculated in various reports," the official stated. He attributed the recent public confusion to notices shared by financial service providers like Moniepoint.
Source of the Confusion: Customer Notices
The need for clarification arose after several banks and FinTech companies began informing their customers about the upcoming VAT requirement. These notices, which started circulating widely, indicated that a 7.5% VAT would be applied to specific electronic banking services from Monday, January 19, 2026.
One such notice from Moniepoint read: "From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS)." It listed that VAT would apply to mobile banking transfer fees, USSD transaction charges, and card issuance fees, while clarifying that interest on deposits remains exempt.
The notice explicitly stated it was not a price increase by the company but a regulatory requirement to collect and remit the tax. However, the language led many customers to believe the cost would be passed directly to them.
Implementation Timeline and Scope
The NRS has directed that all banks, microfinance institutions, and FinTech companies must begin implementing the VAT remittance process by January 19, 2026.
The official reiterated the core message for public assurance: the new VAT regulation is not an additional tax on Nigerians. He confirmed that the tax only affects the banks’ service charges and will not increase the direct cost of transactions for users of mobile banking, USSD, or other listed services.
This move aims to streamline tax compliance within the rapidly growing digital financial services sector while protecting end-users from unexpected charges on their transactions.
