Mobile transfers, USSD to attract 7.5% VAT as new banking charges take effect January 19

Nigerians will reportedly begin paying a 7.5 per cent Value Added Tax (VAT) on selected banking services, including mobile bank transfers and USSD transactions, from January 19, 2026, following a new government-backed regulatory directive.

The development was disclosed in a customer notice issued on Wednesday by digital financial services provider, Moniepoint, informing users of the imminent implementation of VAT on certain electronic banking charges.

According to the notice, the move is in line with a directive from tax authorities mandating financial institutions to commence the collection and remittance of VAT on eligible banking services.

“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” Moniepoint stated.

It added: “From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service.”

The company explained that the VAT would apply to “certain banking services,” specifically electronic banking charges such as mobile banking transfer fees, USSD transaction fees and card issuance fees.

However, Moniepoint clarified that not all banking transactions would be affected, noting that services exempt from VAT include interest earned on deposits and savings.

The firm also distanced itself from responsibility for the new charges, stressing that the deductions were not the result of a price increase.

“This is not a price increase by Moniepoint. We are required by law to collect and remit VAT to the Nigerian Revenue Service,” the notice stated.

Moniepoint further disclosed that the NRS had set January 19, 2026, as the compliance deadline for all financial institutions, including commercial banks, microfinance banks and electronic money transfer operators.

Emphasising the scope of the tax, the company noted that VAT would apply strictly to service charges and not to customers’ funds or interest earnings.

“VAT applies only to banking or service fees, not interest,” it said, adding that the deductions would be transparently displayed.

“VAT charges will appear separately on your transaction reports and statements.”

The new VAT enforcement is expected to affect millions of Nigerians who depend daily on mobile banking platforms and USSD services for financial transactions.