Nigerians to pay 7.5% VAT on selected banking services from January 19, 2026

Starting January 19, 2026, Nigerians will begin paying a 7.5 per cent value-added tax (VAT) on selected banking services, following a government-backed directive aimed at expanding tax coverage within the financial sector.

The new VAT charge will apply to specific electronic banking services, including mobile bank transfers, USSD transactions and card issuance fees.

However, interest earned on savings and deposit accounts will remain exempt from the tax.

The Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS), has directed all financial institutions — including commercial banks, microfinance banks and electronic money transfer operators — to commence the collection and remittance of the VAT from the effective date.

According to the directive, the measure is part of broader efforts to align digital financial services with existing tax regulations, as electronic banking continues to dominate financial transactions across the country.

Millions of Nigerians who rely heavily on mobile and USSD banking platforms for daily transactions are expected to feel the impact of the new charges, as routine transfers and payments will now attract additional costs.

Analysts say the policy marks a significant shift in Nigeria’s digital banking landscape, with potential implications for financial inclusion and consumer spending habits.

Financial institutions are expected to update their systems and notify customers ahead of the implementation date to ensure compliance and transparency.