FG orders banks, fintechs to remit VAT on service charges

The Federal Authorities has directed all banks and fintechs to gather and remit 7.5 per cent value-added tax on sure digital banking providers, efficient Monday, January 19, 2026, based on an electronic mail discover issued by fee platforms.

The VAT will apply to digital banking fees, together with cell cash transfers, USSD transaction charges, and card issuance charges, based on an electronic mail discover on Wednesday shared with clients by Moniepoint.

For instance, if a financial institution fees N100 to make a switch, the 7.5 per cent VAT might be utilized to that service price, not the cash being despatched.

“From Monday, January 19, 2026, we’re required to gather a 7.5 per cent VAT, to be remitted to the Nigerian Income Service (previously generally known as the Federal Inland Income Service).

“VAT will apply to sure banking providers that embrace digital banking fees corresponding to cell banking charges (transfers), USSD transaction charges, and card issuance charges,” the e-mail learn.

Different operators are anticipated to problem related notices to their clients within the coming days. Companies that may stay exempt embrace curiosity earned on deposits and financial savings, that means clients is not going to pay tax on the returns from their accounts.

The NRS, previously generally known as the Federal Inland Income Service, has set the deadline to make sure that all industrial banks, microfinance banks, and digital cash operators adjust to the gathering and remittance requirement.

Moniepoint pressured that this isn’t a worth improve however a statutory obligation. “Moniepoint is required to gather and remit VAT to the Nigerian Income Service,” the corporate mentioned in a press release.

The transfer is a part of the federal government’s broader efforts to standardise VAT assortment on digital monetary providers and develop income technology amid Nigeria’s rising digital economic system. VAT on banking transactions will not be completely new; the NRS is now imposing uniform assortment guidelines throughout all platforms, guaranteeing compliance throughout the sector.

Prospects have been assured that the brand new tax might be clearly itemised, with the VAT proven individually on transaction statements and experiences.

In December, a number of industrial banks knowledgeable clients that the N50 stamp responsibility could be deducted on digital transfers of N10,000 and above, following the graduation of provisions of the brand new Tax Act.

The cost, beforehand generally known as the EMTL, has now been formally reclassified as stamp responsibility and might be utilized as a one-off price on qualifying digital transfers.