Banks Set to Implement 7.5% VAT on Mobile Transfers and PoS Fees

Beginning on January 19, banks will initiate the collection of a 7.5 percent value-added tax (VAT) on services related to banking, which encompasses point of sale (POS) transaction fees as well as mobile transfer charges.

In a notification sent out to its clients, Moniepoint Microfinance Bank specified that the new charge arises from a regulatory directive supported by the government. The VAT is applicable alongside the existing N50 stamp duty; however, it will not influence the actual values of withdrawals or transactions.

Moniepoint indicated that the tax revenue would be redirected to the Nigerian Revenue Service (NRS). The bank communicated, "We are writing to inform you about an upcoming regulatory change endorsed by the government that pertains to Value Added Tax (VAT)."

From January 19, 2026, it will be mandatory for us to collect a VAT of 7.5%, which will be remitted to the Nigerian Revenue Service (NRS), previously referred to as the Federal Inland Revenue Service.

"The VAT will be applicable to specific banking services, including electronic banking fees such as POS transaction charges, mobile banking service fees (transfers), USSD transaction expenses, POS activation costs, card issuance fees, and Moniebook subscriptions," the bank added.

Furthermore, the institution stated that the tax will also extend to other types of fees, which include loan processing and documentation costs. Services exempt from VAT comprise interest on loans and advances, along with interest on deposits and savings, clarified Moniepoint.

"It is important to note that this is not an increase in pricing from Moniepoint. The responsibility to collect and submit VAT to the Nigerian Revenue Service (NRS) falls on us," the statement continued.

"The NRS has set a deadline of January 19 for all financial institutions, such as commercial banks, microfinance banks, and electronic money transfer services, to commence collecting and remitting VAT."

The bank further explained that VAT is only applied to banking service charges and not on interest, and this charge will be displayed separately in transaction statements. The VAT rate remains unchanged at 7.5 percent according to the existing tax legislation.