What’s changing
Starting January 19, 2026, Nigerians may begin paying a 7.5% Value Added Tax (VAT) on certain banking services, including mobile money transfers, USSD banking, and related transactions. The proposal, still drawing responses from customers and industry players, suggests that standard banking fees could be subject to VAT, potentially altering the cost of everyday financial activities carried out via mobile devices and bank networks.
Why the concern over double taxation
Industry watchers and some banking customers worry that the 7.5% VAT on these services could amount to double taxation if other levies or fees tied to the same transactions remain in place. NATCOMS, the telecommunications regulatory body, has highlighted that financial services often cross jurisdictions between telecoms and banks, raising questions about how VAT should be applied without unfairly stacking charges on the same customers.
Impact on customers
For everyday Nigerians who rely on mobile transfers or USSD access to their bank accounts, a 7.5% VAT could increase the total cost of transfers, bill payments, airtime purchases, and other mobile-enabled banking services. Small transfers that previously cost a minimal amount could become noticeably pricier when VAT is added. Consumers may notice higher receipts for transactions that were once near-barrier free, particularly among low-income households that use mobile banking as a primary financial tool.
Industry response and potential outcomes
NATCOMS and partner regulators are under pressure to clarify how VAT will be calculated and collected on digital banking services. Stakeholders are asking for a transparent framework that avoids unfair pass-throughs to customers while ensuring adequate tax collection for public services. The discussion includes how VAT interacts with other charges, such as service fees, interchange, and digital platform costs, to determine the true price of banking activities conducted via mobile devices.
What to watch for next
The coming weeks will likely bring official guidance from tax authorities and regulatory bodies on definitions (which transactions qualify as taxable), exemptions, and the point at which VAT applies (per transaction, per month, or at a mixed rate). Customers should monitor annuled or updated notices from banks and telecoms operators to understand when VAT will be applied at the point of sale or during settlement of digital transfers.
Practical tips for customers
- Review recent bank statements and transaction receipts to identify any VAT charges that appear on mobile transfers.
- Contact your bank’s customer service for a clear explanation of how VAT will be implemented for the services you use most.
- When possible, compare fees for different transfer methods (mobile app vs. USSD) to gauge which option minimizes tax impact.
- Keep an eye on official guidance to understand any exemptions or thresholds that could affect small-value transfers.
What this means for the broader economy
Supporters argue that VAT on digital banking services could broaden the tax base and fund vital public services. Critics warn that higher transactional costs might slow financial inclusion if users shift to informal channels or fewer digital options. The balance between fair taxation and accessible financial services will depend on the final regulatory framework and how well it is communicated to the public.
Bottom line
As January 2026 approaches, Nigerians should prepare for potential 7.5% VAT on mobile banking services, including transfers and USSD banking. Staying informed through official channels and seeking clarity from banks can help customers minimize surprise charges while the regulatory picture clarifies how, when, and where VAT will apply.
