Nigerians have been urged to brace for tougher economic conditions as a new 7.5 per cent Value Added Tax (VAT) on selected banking services, including mobile bank transfers and USSD transactions, takes effect from January 19, 2026.
The development was disclosed in a customer notice issued on Wednesday afternoon by fintech firm Moniepoint, which linked the change to a directive from the Nigerian Revenue Service (NRS) mandating financial institutions to begin VAT collection and remittance on specific electronic banking services.
“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice stated.
“From Monday, 19 January 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service.”
The announcement comes amid growing frustration among bank customers following the rollout of a new tax framework under the Nigerian Tax Act, which took effect on January 1, 2026.
Under the new law, a ₦50 electronic money transfer levy on transactions of ₦10,000 and above is now deducted from the sender’s account, rather than the recipient’s, shifting the burden of the charge to those initiating transfers.
Banks have since begun notifying customers ahead of the implementation, emphasising that the changes are regulatory requirements rather than new fees. In a notice to customers, Access Bank explained that the levy would “no longer be charged to the recipient but will now be deducted from the sender’s account,” adding that all deductions would be “duly remitted to the Federal Government in line with regulatory requirements.”
Although the ₦50 levy appears modest, the change has triggered widespread criticism, particularly among Nigerians who depend heavily on frequent digital transfers to support families, pay bills, or run small businesses.
Many customers argue that when combined with existing bank and fintech transfer charges, the levy represents yet another pressure on household finances already strained by high inflation and a weak currency.
The policy effectively reverses a long-standing practice where recipients bore the levy and often received less than the amount sent. From 2026, recipients will now receive the full value of transfers — a shift welcomed by salary earners, small traders, and households dependent on remittances.
However, the visibility of the deduction on the sender’s side has intensified public discontent. On social media, users have described the move as another instance of “hidden taxes becoming explicit” in Nigeria’s increasingly digital economy.
Some analysts warn that the additional costs could discourage electronic payments and push users back toward cash-based transactions, potentially undermining years of progress in financial inclusion and digital banking adoption.
For Nigerians in the diaspora, the changes also introduce another cost layer in an already expensive remittance process. While international transfer fees and foreign exchange spreads remain the primary expenses, the ₦50 levy applies once funds are credited to Nigerian accounts, meaning overseas senders will ultimately bear the cost on qualifying transfers.
