By Nigerian banks will begin charging Value Added Tax (VAT) on some banking services from Monday, January 19, 2026, following a new regulatory directive.
Under the new rule, banks are required to collect a 7.5 percent VAT on certain service charges and remit it to the Nigerian Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS).
The VAT will apply to banking service fees such as mobile and electronic transfer charges, USSD transaction fees, and card issuance fees. However, services like interest earned on savings and deposit accounts will not attract VAT.
Banks have explained that the VAT charge is not a price increase by financial institutions. Instead, they are acting in compliance with government regulations that require them to collect the tax on behalf of the NRS.
According to the directive, all financial institutions, including commercial banks, microfinance banks, and electronic money transfer operators, must start collecting and remitting VAT from the stated date.
Customers will see the VAT charge listed separately on their transaction reports and bank statements to ensure transparency.
The new policy is part of efforts by the government to improve tax collection across service sectors in the country.
