Nigerians to Pay 7.5% VAT on Mobile Bank Transfers, USSD Transactions
- Nigerians will face a new 7.5% VAT on selected digital banking services from January 2026
- Moniepoint clarifies that the VAT is not a price increase initiated by the company
- Consumer groups criticise the tax as burdensome, warning it could lead to financial strain on Nigerians
Nigerians will begin paying a 7.5 per cent Value Added Tax (VAT) on selected digital banking services, including mobile bank transfers and Unstructured Supplementary Service Data (USSD) transactions, following a new government-backed regulatory directive.
The new tax regime, which takes effect from January 2026, is expected to affect millions of Nigerians who rely heavily on mobile banking platforms and USSD codes for daily financial transactions, especially those without access to smartphones or internet banking.
Source: UGC
Moniepoint alerts customers to new VAT rule
Fintech operator Moniepoint disclosed the development in a notice sent to its customers, explaining that the directive was issued by Nigeria’s tax authorities and applies across the financial sector.
According to the company, financial institutions are now required to collect and remit a 7.5 per cent VAT on specific banking services to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS).
“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT). From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service,” Moniepoint said.
Services affected by the VAT
Moniepoint clarified that the VAT will apply strictly to certain service charges.
These include electronic banking fees such as mobile transfer charges, USSD transaction fees, and card issuance fees.
However, the fintech firm stressed that not all banking transactions will attract the tax.
Interest earned on savings and deposits, for instance, remains exempt from VAT under the new directive.
The company also emphasised that the deductions would be transparent, noting that VAT charges would be clearly itemised and shown separately on customers’ transaction reports and account statements.
‘This is not a price increase’ — Moniepoint
Distancing itself from responsibility for the additional charges, Moniepoint said the VAT was not a price increase initiated by the company.
“This is not a price increase by Moniepoint,” the firm stated. “We are required by law to collect and remit VAT to the Nigerian Revenue Service.”
It further disclosed that the tax authority has set a firm deadline for compliance, directing all commercial banks, microfinance banks, and electronic money transfer operators to begin VAT collection and remittance by January 19, 2026.
NATCOMS kicks against ‘multiple taxation’
The move has sparked strong reactions from consumer advocacy groups. President of the National Association of Telecom Subscribers of Nigeria (NATCOMS), Deolu Ogunbanjo, described the policy as cruel and burdensome.
According to him, subscribers are already paying ₦6.98 per USSD session, and the additional VAT amounts to double or even multiple taxation on the same service.
“Consumers are already paying for USSD access, now they want to add 7.5 per cent VAT on top of that,” Ogunbanjo said.
“The Federal Government should urgently review this policy. It will place more financial pressure on Nigerians. If this is not reviewed, we will go to court.”
Millions set to feel the impact
With mobile banking and USSD services forming the backbone of everyday transactions for many Nigerians, especially small traders and rural users, the new VAT enforcement is expected to have widespread economic and social implications.
Other banks and fintech companies are expected to issue similar notices to customers as the compliance deadline approaches.
The development comes after the Nigerian government reintroduced N50 Stamp Duty, which is paid the by the sender.
Source: UGC
Experts say the introduction of VAT on mobile transfers and USSD transactions are too much burden on Nigerians.
Banks to debit Customers N50 on Stamp Duty
Legit.ng earlier reported that banks in Nigeria will begin charging senders a N50 stamp duty on electronic transfers of N10,000 and above, following the implementation of the updated Tax Act starting January 1, 2026.
The levy, also referred to as the Electronic Money Transfer Levy (EMTL), is a one-off charge applied to electronic receipt or transfer of funds deposited in any commercial bank or financial institution.
It covers all types of accounts for transactions of N10,000 or more.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
