Nigerian banks will begin deducting a 7.5 percent Value Added Tax (VAT) on selected banking service charges, including POS transaction fees and mobile transfer fees, effective January 19, 2026.
The deduction follows a government-approved regulatory directive requiring financial institutions to collect VAT on eligible banking services and remit the proceeds to the Nigerian Revenue Service (NRS).
The move affects commercial banks, microfinance banks, and electronic money transfer operators across the country.
In a notice to customers, Moniepoint Microfinance Bank explained that the VAT applies strictly to service charges and not to the actual amount being transferred or withdrawn.
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According to the bank, affected charges include POS transaction fees, mobile and USSD transfer fees, POS activation fees, card issuance fees, Moniebook subscriptions, as well as loan processing and documentation fees.
The bank clarified that interest on loans, deposits, and savings remains exempt from VAT. It also stressed that the deduction does not represent a price increase by banks but a statutory requirement imposed by the tax authorities.
Customers will see the VAT listed separately on transaction statements to ensure transparency. The development aligns with Nigeria’s existing tax framework, which maintains the VAT rate at 7.5 percent, while expanding its application to certain financial service fees.
The NRS has directed all financial institutions to fully comply with the policy from the implementation date.