Nigerians are grappling with uncertainty following the announcement of a 7.5% Value Added Tax (VAT) on specific banking fees, set to take effect on January 19, 2026. This decision, initially communicated by Moniepoint and subsequently supported by other financial institutions, is part of a broader compliance effort with federal tax regulations. The publication provides the following information:
Introduction of New VAT on Banking Fees
The new VAT will be applied to various banking fees, including those associated with:
- Point of Sale (POS) transactions
- Loan processing
Impact on Customers
However, it is important to note that this tax will not impact the principal amounts that customers transfer or deposit, aiming to mitigate fears of rising costs for essential banking services. Financial institutions are working to ensure that customers are well-informed about these changes and their implications.
In light of the recent introduction of a 7.5% VAT on banking fees, the Nigeria Revenue Service has clarified the tax's applicability, emphasizing that it only affects service fees and not the total transfer amounts. For more details, see the full report here.
