Several Nigerian banks, including Moniepoint, have announced plans to begin charging a 7.5 percent Value Added Tax (VAT) on bank transfers and USSD transactions, in line with a new government directive.
According to official customer notifications sent on Wednesday, the new VAT charge will take effect from January 19, 2026. The directive was issued by the Nigeria Revenue Service (NRS), the federal agency responsible for tax collection in Nigeria.
WHY BANKS ARE IMPLEMENTING THE VAT CHARGE
Banks explained that the move is part of a government-approved adjustment to VAT collection, requiring financial institutions to deduct VAT at the point of transaction and remit it directly to the tax authority.
In its notice to customers, Moniepoint stated that the VAT deduction is mandatory and applies to electronic banking services, including mobile transfers and USSD-based payments.
The NRS was formerly known as the Federal Inland Revenue Service (FIRS).
VAT IS SEPARATE FROM EXISTING BANK CHARGES
Customers were also informed that the 7.5% VAT is not replacing existing fees. Charges such as the ₦50 stamp duty and other standard transaction fees will still apply separately.
Banks advised customers to consider the added VAT cost when making digital banking transactions.
KEY DETAILS AT A GLANCE
- VAT Rate: 7.5%
- Affected Transactions: Bank transfers and USSD payments
- Implementation Date: January 19, 2026
- Responsible Authority: Nigeria Revenue Service (NRS)
- Applies To: All eligible electronic banking users
Frequently Asked Questions (FAQs)
1. When will the 7.5% VAT on bank transfers start?
The VAT charge will begin on January 19, 2026.
2. Which transactions are affected?
The VAT applies to bank transfers and USSD transactions across participating Nigerian banks.
3. Is this VAT replacing stamp duty?
No. The VAT charge is separate from the ₦50 stamp duty and other existing banking fees.
4. Why are banks charging VAT now?
Banks are implementing the charge due to a directive from the Nigeria Revenue Service, following updated VAT collection regulations approved by the government.
5. Will all Nigerian banks apply this VAT?
Most commercial banks and fintech platforms are expected to comply, as the directive applies industry-wide.