From January 19, 2026, Nigerians will begin paying a 7.5% Value Added Tax (VAT) on a range of selected banking and fintech service charges as part of a government endorsed regulatory change directed by the Nigerian Revenue Service (NRS).
Under the new policy, VAT will be applied to the service fees charged on digital finance transactions, rather than the principal amounts being transferred.
Below are the top five types of transactions expected to attract the 7.5% VAT;
1. Mobile Banking Transfer Fees
Customers who use bank apps or mobile banking platforms to transfer money will now see an additional 7.5% VAT on the service fee charged for such transfers. This applies across traditional banks and fintech platforms.
2. USSD Transaction Charges
Transactions performed using USSD codes (e.g., *901#, *919#, *322#), popular among customers without smartphone access, will attract the tax on the service charge when money is sent or moved.
3. Point of Sale (POS) Transaction Fees
POS charges taken by banks or retail POS operators when customers pay for goods and services will be subject to the 7.5% VAT on the transaction fee portion.
4. Card Issuance and Activation Fees
Fees associated with issuing or activating debit, credit, or prepaid cards will also attract VAT under the new directive.
5. Loan Processing and Documentation Fees
While interest on loans remains exempt, certain administrative charges such as processing and documentation fees for loan applications are now liable for VAT.
What Is Not Taxed
The authorities have clarified that interest on deposits, savings, and loans will not attract 7.5% VAT. The tax is specifically on fee based services, and the VAT will be listed separately on statements to ensure transparency for customers.
Why the New Tax Now?
Nigerian authorities are expanding the tax base as digital financial services grow rapidly, requiring fintechs and banks to collect and remit VAT on service charges to boost revenue from the financial sector.