The Nigeria Revenue Service (NRS) has moved to dispel growing public anxiety following notices from banks and fintech platforms regarding a 7.5% Value-Added Tax (VAT) on electronic transactions.
The agency clarified on Thursday that the tax—effective Monday, January 19, 2026—is strictly applied to the service fees charged by financial institutions, not the actual money being sent or received by customers.
The clarification comes after leading fintechs, including Moniepoint, alerted customers that they are now required to collect and remit VAT on “certain electronic banking services.”
While the sudden wave of notifications suggested a new tax hike, the NRS (formerly the FIRS) explained that this is a matter of compliance, not a new law. “VAT has always applied to fees, commissions, and charges for services rendered by banks under Nigeria’s long-established tax regime,” stated Dare Adekanmbi, Special Adviser on Media to the NRS Chairman. “What changed is compliance and enforcement, not the law.”
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To ease concerns about the “cost of sending money,” the NRS provided a clear breakdown of how the 7.5% charge works:
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The Rule: The tax applies only to the bank’s commission.
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The Example: If a bank charges you ₦100 as a transfer fee, the VAT is ₦7.50 (7.5% of the fee).
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The Result: Your total cost for that specific transaction would be ₦107.50. The ₦10,000 or ₦1,000,000 you are transferring remains completely untouched by VAT.
In a move to protect the savings culture and the most vulnerable citizens, the NRS highlighted several areas that are strictly VAT-free:
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Savings & Deposits: Interest earned on savings accounts and fixed deposits does not attract VAT.
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Essential Goods: Basic food items and household essentials.
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Health & Education: Medical services, pharmaceutical products, and tuition fees.
The government’s directive aims to standardize tax collection across the booming digital economy, ensuring that traditional commercial banks, microfinance banks, and electronic money operators follow the same rules.
This move follows the December reclassification of the Electronic Money Transfer Levy (EMTL) as a ₦50 stamp duty on transfers of ₦10,000 and above. The NRS emphasized that these measures are intended to expand revenue generation through existing frameworks rather than creating new burdens during a period of rising living costs.
The agency concluded by urging Nigerians to disregard “misleading narratives” and rely on official communications for accurate tax information as the January 19 deadline approaches.
