FG directs banks, fintechs to collect 7.5% VAT on electronic banking fees

The Federal Government has directed banks and financial technology firms to begin collecting and remitting a 7.5 per cent value-added tax (VAT) on selected electronic banking services, effective Monday, January 19, 2026.

The directive, communicated to customers through email notices from payment platforms, applies to charges on services such as mobile money transfers, USSD transactions and card issuance fees. An email circulated by Moniepoint on Wednesday clarified that the VAT will be charged on service fees, not on the actual amount transferred.

“For instance, where a bank charges N100 as a transfer fee, the 7.5 per cent VAT will apply only to the N100 service charge,” the notice explained.

According to Moniepoint, the company is required to collect and remit the VAT to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service. “From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT to be remitted to the Nigerian Revenue Service,” the email read.

The bank stressed that the development does not amount to a price increase but reflects compliance with statutory tax obligations. Other banks and fintech operators are expected to issue similar notices to their customers in the coming days.

Services exempted from the VAT include interest earned on savings and deposit accounts, meaning customers will not be taxed on returns from their funds.

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