Public anger is mounting across Nigeria following confirmation that a 7.5 per cent Value Added Tax (VAT) will be imposed on mobile bank transfers and USSD transactions starting January 19, 2026, a move many Nigerians say will deepen the cost-of-living crisis and punish the poor who rely heavily on digital banking for daily survival.
The development became public after Moniepoint, a major fintech operator, circulated an official notice to customers informing them that the new charges were not company-driven but mandated by a government-backed directive requiring financial institutions to apply VAT on certain electronic banking service fees.
According to the notice, the tax directive originated from the Nigeria Revenue Service (NRS), the federal tax authority, which has instructed banks, fintechs, and electronic money operators to begin collecting and remitting VAT on applicable transaction charges across the financial system.
From the implementation date, fees charged on mobile banking transfers and USSD transactions will attract a 7.5 per cent VAT, meaning customers will pay more for routine activities such as sending money, paying bills, and conducting basic financial transactions via short codes.
Financial institutions clarified that the VAT will apply only to service charges imposed by banks and fintechs, not the actual amount being transferred. However, consumer groups argue that even marginal increases disproportionately affect low-income earners who conduct frequent small-value transactions.
The directive also extends to card-related charges and other electronic banking service fees, further widening the scope of transactions now subject to VAT, at a time when Nigerians are already grappling with rising fuel prices, food inflation, and multiple government levies.
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Moniepoint stressed that the new charges are statutory deductions required by law and not a fee increment introduced by service providers, noting that VAT deductions will be clearly itemised on transaction receipts and customer statements to ensure transparency.
Despite these assurances, the announcement has triggered widespread backlash on social media, with many Nigerians accusing the government of targeting digital banking as an easy revenue source while ignoring the economic hardship faced by ordinary citizens.
Critics warn that the policy could discourage financial inclusion by pushing users back to cash-based transactions, undermining years of progress made in expanding access to digital financial services, particularly among the unbanked and underbanked population.
Authorities have maintained that interest earned on savings and deposits remains VAT-exempt, but this has done little to calm public frustration, as most Nigerians interact with the banking system primarily through transfers and USSD payments rather than savings interest.
With January 19 fast approaching, pressure is mounting on the federal government to clarify the policy, justify its timing, and address public concerns that the VAT move represents yet another burden on citizens already stretched thin by Nigeria’s worsening economic realities.
