Banks to deduct 7.5% VAT on transfers, PoS fees from January 19

By Ademola Adekusibe
January 15, 2026

Banks across Nigeria will begin deducting 7.5 percent Value Added Tax (VAT) on selected banking service fees, including mobile transfers and Point of Sale (PoS) transaction charges, from January 19, 2026.

The development was communicated to customers by Moniepoint Microfinance Bank in an email notification, where the bank explained that the deduction follows a government-endorsed regulatory directive.

According to the notice, the VAT is not charged on the actual amount transferred or withdrawn by customers. Instead, it applies strictly to service-related charges, such as the N50 stamp duty and other transaction fees, with the proceeds remitted to the Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS).

Moniepoint stated that from January 19, all financial institutions are required to collect and remit the tax on behalf of the government.

The services affected by the VAT include electronic banking charges such as PoS transaction fees, mobile banking transfer fees, USSD transaction fees, PoS activation fees, card issuance fees, and Moniebook subscription charges. Loan processing and documentation fees will also attract the tax.

However, the bank clarified that certain services remain exempt from VAT. These include interest on loans and advances, as well as interest earned on deposits and savings.

The bank stressed that the VAT implementation does not represent a price increase by Moniepoint or other banks, but a statutory obligation imposed by the government. Customers will see the VAT itemised separately on transaction receipts and account statements for transparency.

The new directive aligns with Nigeria’s existing tax framework, which retains the VAT rate at 7.5 percent under the current tax laws.