Nigeria VAT hike hits bank transfers with 7.5 percent charge

Nigerian banks, including Moniepoint, have notified their customers of an impending 7.5 percent Value Added Tax (VAT) on bank transfers and Unstructured Supplementary Service Data (USSD) transactions. The new tax, which takes effect on January 19, 2026, is in line with a directive from the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service.

According to a customer notice, the VAT charge is a result of a government-approved regulatory adjustment on VAT collection. The bank emphasized that this new tax is separate from existing fees, such as the N50 stamp duty and other transaction-related charges that customers currently pay. The 7.5 percent VAT will be remitted to the NRS.

The introduction of this VAT on banking transactions is part of the government’s efforts to broaden its tax base and increase revenue. While the NRS has not issued an official statement on the matter, the development is seen as a significant move to enhance tax collection in the country.

It is worth noting that the Executive Chairman of the NRS, Dr. Zacch Adedeji, recently denied reports of plans to tax or directly debit individual bank accounts. The new VAT charge, however, applies to specific banking services, including transfers and USSD transactions.

As the implementation date approaches, customers are advised to factor in the additional cost when conducting transactions. The impact of this new tax on banking activities and the overall economy remains to be seen. The NRS is expected to provide more clarity on the implementation and expected revenue projections from this new VAT charge in the coming days. With the new tax set to take effect soon, stakeholders will be watching closely to see how it affects the banking sector and the country’s tax landscape.