Amanze Chinonye
Nigerians sending money through mobile banking or USSD platforms will, from Monday, January 19, 2026, incur a 7.5 percent Value Added Tax (VAT) on service charges, following a directive issued by the Federal Government.
The instruction affects banks and financial technology companies, requiring them to collect and remit VAT on selected electronic banking services, including mobile money transfers, USSD payments, and card issuance fees.
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Join our WhatsApp ChannelMoniepoint, one of the leading payment platforms, notified its customers via email that the tax will apply exclusively to service fees, not the total amount transferred. The notice explained: “If a transfer fee is ₦100, the 7.5 percent VAT will be calculated on the ₦100 charge, not the transferred amount.”
The fintech firm emphasized that this is not a price increase, but a mandatory tax compliance measure, with the proceeds to be remitted to the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service. Other banks and fintech operators are expected to send similar notifications to their customers in the coming days.
Certain financial activities, such as interest earned on savings and deposit accounts, are exempt from this VAT, ensuring that customers will not be taxed on earnings from their funds.
Analysts note that this move is part of the government’s ongoing strategy to regulate digital financial transactions and expand the VAT base as Nigeria’s cashless economy continues to grow.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
