Nigerians to pay 7.5% VAT on mobile transfer, USSD from next week

The federal government will start the collection of Value Added Tax of 7.5 percent on selected banking services, including mobile bank transfers and USSD transactions, from January 19, 2026. A notice sent to customers of Moniepoint yesterday said this followed a new government-backed regulatory directive. According to the notice, the development is tied to a […]

The federal government will start the collection of Value Added Tax of 7.5 percent on selected banking services, including mobile bank transfers and USSD transactions, from January 19, 2026.

A notice sent to customers of Moniepoint yesterday said this followed a new government-backed regulatory directive.

According to the notice, the development is tied to a directive from tax authorities mandating financial institutions to begin VAT collection and remittance.

“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice 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 disclosed that the tax will apply to “certain banking services,” including “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”

However, Moniepoint clarified that not all banking-related transactions would attract the tax, noting that “services that DO NOT attract VAT include: interest on deposits and savings.”

The firm also distanced itself from responsibility for the new charges, stressing that “this is not a price increase by Moniepoint.”

“Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS),” the notice read.

It further explained that the tax authority had issued a clear timeline for compliance across the financial sector.

“The NRS has communicated a deadline for 19th January 2026 for all financial institutions (commercial banks, microfinance banks and electronic money transfer operators) to start collecting and remitting VAT,” the statement said.

Moniepoint also emphasised that the VAT would be limited strictly to service charges, stating that “VAT applies only to banking or service fees, not interest.”

Customers were also informed that the deductions would be clearly itemised, as “VAT charge will appear separately on your transaction reports and statements.”

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

Daily Trust reports that this is coming on the heels of the introduction of Stamp duty on transfers above N10,000.

This means that a bank transfer would cost Nigerians close to N100 as another N25 is charged for the transfer by the Nigerian Payment System while SMS charge and VAT on the SMS charge will be deducted at the end of the month.

As of yesterday, it was not clear where the new VAT would be deducted. Already, VAT is deducted from bank charges on each electronic transfer.

For instance, interbank transfer costs N25 plus N1.88 as VAT charges and N50 and 3.75 as VAT charges for transfer above N100,000.

This however adds to the cost of transfer with the addition of stamp duty of N50 per transaction.   

Daily Trust reports that this has added to the long list of charges paid by customers which has attracted scrutiny over the years.

 

 Telecom operators, consumers kick

The telecom operators and Nigerian telecommunication consumers under the aegis of the National Association of Telecoms Subscribers of Nigeria (NATCOMS) described the move by the Federal Government to introduce the 7.5 % VAT on bank transfer and USSD services as a policy made to make Nigerians poorer. 

According to NATCOMS, Nigerians are already suffering as a result of harsh economic conditions and another tax on telecom subscribers will further impoverish many, especially as USSD and bank transfer are essential to almost everyone.

The Association of Licensed Telecom Operators of Nigeria (ALTON) could not be reached yesterday night as its chairman, Engr. Gbenga Adebayo’s mobile line was not connecting.

But an official of one of the big four mobile operators described the VAT on USSD as unusual, saying that it will increase the burden on the telecom customers and in the end reduce telecom operators’ revenue.

The official who pleaded anonymity said telecom operators aren’t in support of the tax, saying that it does not comply with the principles of taxation which include fairness. 

The implementation of the new VAT policy according to him will cause revenue loss; job loss stressing it is badly intended.  

Also the President of National Association of Telecoms Subscribers (NATCOMS) Chief  Adeolu Ogunbanjo, lamented that telecom consumers are already heavily taxed with charges made on virtually every transaction done via online banking, one via USSD. 

According to him, the new VAT will worsen the inflation in the country. 

“This will be a huge burden on Nigerians. This move is insensitive and unpalatable”, he added. 

Ogunbanjo urged the government to reverse its decision on VAT on USSD and bank transfer in the interest of the people as the telecom industry is the last hope of the common man and should not be destroyed.

Some Nigerians who spoke with Daily Trust yesterday rejected the new VAT policy, describing it as over-taxation through the backdoor.

A Lagos-based resident, Michael who spoke with our correspondent said, “Does that mean after my employers take out taxes from my salary, I will still be paying VAT on transfers I make to my family members or anybody.

“This is unacceptable and we must reject it wholeheartedly. This tax is unjustified. They have already taxed people, if you renew your vehicle papers, this is part of taxation. If you get a new number plate, you pay tax,” he added.  

An activist who spoke on the condition of anonymity said the taxes are becoming burdensome, warning that this might trigger protests if not carefully handled.