Banks notify customers of 7.5% VAT on transfers, USSD transactions from January 19

Several Nigerian banks, including Moniepoint, have notified their customers of the introduction of a 7.5 per cent Value Added Tax (VAT) on bank transfers and Unstructured Supplementary Service Data (USSD) transactions, following a directive from the Nigeria Revenue Service (NRS).

According to a customer notice obtained recently, the VAT charge will take effect from January 19, 2026, and forms part of a government-approved regulatory adjustment to the collection of VAT on financial services.

In the notification sent to customers, the bank stated: “From Monday, January 19, 2026, we are mandated to apply a 7.5 per cent VAT, which will be remitted to the Nigeria Revenue Service (NRS), previously known as the Federal Inland Revenue Service.”

The banks clarified that the new VAT charge is separate from existing transaction-related fees, including the N50 stamp duty and other charges currently borne by customers on eligible transfers.

While Moniepoint and other financial institutions have begun informing customers, the NRS has yet to issue an official public statement specifically addressing the implementation of VAT on bank transfers and USSD transactions as of the time of reporting.

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The development has generated concern among bank customers, particularly amid rising transaction costs and broader cost-of-living pressures.

Some industry observers note that the move could increase the overall cost of digital banking, especially for low-income users who rely heavily on USSD and transfer services for everyday transactions.

Recall that the Executive Chairman of the NRS, Dr. Zacch Adedeji, on Tuesday dismissed reports suggesting that the Federal Government plans to tax or directly debit individual bank accounts.

He clarified that government policy does not involve the direct taxation of personal savings, a statement aimed at calming public anxiety over recent tax-related reforms.

Analysts say clearer communication from tax and regulatory authorities will be crucial to address public concerns and explain the scope of the VAT, including whether it applies to service charges, transaction fees or the transaction amounts themselves.

Financial sector experts also warn that while the VAT may improve government revenue, its impact on financial inclusion and the cost of digital payments will need to be carefully monitored in the coming months.