New tax regime expands VAT net to selected digital banking services, affecting millions of everyday transactions nationwide.
Everyday banking transactions in Nigeria are set to become more expensive from 19 January 2026, as customers begin paying a 7.5 per cent Value Added Tax (VAT) on selected banking services, including mobile transfers and USSD transactions.
The new charge, which applies to specific digital banking services, marks a significant expansion of VAT coverage within the financial sector and is expected to affect millions of Nigerians who rely on mobile and USSD platforms for daily payments.
Under the arrangement, banks will apply the statutory VAT rate to eligible transaction fees, meaning customers may see higher charges when carrying out transfers or using USSD codes for payments and account services.
While VAT has long applied to certain financial services, the inclusion of commonly used digital channels represents a notable shift, particularly for low-income earners and small businesses that depend heavily on mobile banking due to limited access to physical branches.
Industry analysts say the move aligns with the federal government’s broader push to widen the tax base and boost non-oil revenue, but warn it could further strain household finances at a time of persistent inflation and rising living costs.
Banks are expected to notify customers and adjust their billing systems ahead of the January 19 implementation date.
As Nigerians increasingly turn to digital banking for convenience and accessibility, the new VAT regime is likely to reignite debate over taxation, financial inclusion and the cost of basic financial services.
