FG tells banks, fintechs to collect VAT on service fees
The Federal Government has instructed all banks and fintechs to start collecting and remitting 7.5% value-added tax on specific electronic banking services. This directive, communicated through email notices from payment platforms like Moniepoint, will affect charges such as mobile transfers, USSD fees, and card issuance. The move aims to standardise VAT collection across digital financial services and boost government revenue. Customers will see the VAT itemised separately on their transaction statements.
TLDR
- Banks and fintechs must collect and remit 7.5% VAT on certain electronic banking service fees starting Monday, January 19, 2026.
- The VAT applies to service charges like mobile money transfers, USSD transaction fees, and card issuance fees, not to the transaction amount itself.
- Interest earned on deposits and savings will remain exempt from VAT.
- The Nigerian Revenue Service (formerly the Federal Inland Revenue Service) set the compliance deadline for all commercial banks, microfinance banks, and electronic money operators.
- In December, commercial banks notified customers about the N50 stamp duty on electronic transfers of N10,000 and above, now reclassified under the new Tax Act.
