Nigeria’s FG mandates 7.5% VAT on Bank Transfers, USSD, and Fintech Transactions

Nigeria’s FG Mandates 7.5% VAT on Bank Transfers, USSD, and Fintech Transactions is now the new reality for millions of Nigerians who rely on mobile banking, USSD codes, and fintech apps to move money every day. Effective Monday, January 19, 2026, a 7.5% Value-Added Tax (VAT) will apply to certain electronic banking service charges, marking a major shift in how digital financial services are taxed in the country.

What Exactly Is Changing?

The Federal Government has directed banks and financial technology companies to begin collecting VAT on service fees tied to electronic transactions. This includes charges for:

•         Mobile and app-based bank transfers
•         USSD transactions
•         Some other eligible digital banking services

What it does not include is the actual money you are sending or receiving. If you transfer ₦50,000, VAT will not touch that amount. Instead, the tax applies only to the fee the bank or fintech charges for carrying out the transaction.

If a bank charges ₦100 as a transfer fee, 7.5% VAT will be added to ₦100, not to the ₦50,000 you are moving.

Why the Government is Doing This

The policy is part of a broader fiscal reform agenda aimed at boosting Nigeria’s non-oil revenue and bringing the fast-growing digital economy under the tax net. With more people using mobile apps, USSD, and fintech platforms instead of physical banking halls, the government wants to ensure that these digital services contribute their fair share to national revenue.

Tax authorities now operating under the Nigerian Revenue Service (NRS), formerly known as FIRS, say the move will help improve transparency, close revenue leakages, and strengthen tax compliance across the financial system.

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What Banks and Fintechs Are Telling Customers

Several platforms have already begun sending out notices. Moniepoint, for example, explained that VAT is not a new fee invented by banks but a statutory government tax that banks are required to collect and remit.

As stated, from January 19, 2026, it is legally required to collect a 7.5% VAT on applicable service charges and remit it to the Nigerian Revenue Service. Other banks and fintech companies are expected to roll out similar notifications.

This is why Nigeria’s FG mandate of 7.5% VAT on bank transfers, USSD, and fintech transactions is not about banks increasing prices on their own; it is about enforcing existing tax law on digital services.

What Is Exempt?

Not everything in your bank account is affected. Interest earned on savings and deposit accounts remains VAT-free. That means your money is not taxed under this policy; only fees for certain electronic services are taxed.

What This Means For Everyday Nigerians

For many people, especially small business owners, students, and families who use USSD and mobile transfers daily, the change will result in slightly higher charges on some transactions. It may not seem like much on a single transfer, but over time, it can add up.

That is why it is important to understand how the VAT works and factor it into your financial planning, especially if you rely heavily on digital payments.

As Nigeria’s FG mandates 7.5% VAT on bank transfers, USSD, and fintech transactions, this signals that digital finance is now fully part of Nigeria’s tax system, just like traditional banking.

The Bigger Picture

With digital transactions surging nationwide, analysts say this policy reflects a global trend: governments ensuring that online and electronic services are properly taxed. For Nigeria, it is also a way to reduce dependence on oil revenue and tap into the booming fintech and mobile banking space.

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For users, the key takeaway is simple: monitor transaction fees, understand what you are being charged for, and plan for the new VAT regime as it takes effect.

As 7.5% VAT on bank transfers, USSD, and fintech transactions becomes part of everyday banking, Nigerians will adjust not just how they move money but also how they think about the true cost of digital convenience.