National President, Agents Association of Nigeria, Sarafadeen Atanda Fasasi, has faulted the planned 7.5 per cent VAT applicable on bank transfers and USSD from January 19, 2026.

Recall that indications emerged on Wednesday that from Monday, Nigerians will begin to pay a 7.5 per cent VAT on selected banking services, including mobile bank transfers and Unstructured Supplementary Service Data (USSD) transactions, following a new government-backed regulatory directive.

Fintech operator, Moniepoint, in a notice sent to its teeming customers yesterday, said it was a directive from tax authorities mandating financial institutions to begin VAT collection and remittance.

Commenting on the development, Fasasi said it amounted to duplicating VAT, saying payments are actually for settlements of goods or services, stressing that payments don’t exist in isolation.

According to him, every payment has a primary article or service, which is taxed.

“For instance, buying a carton of Noodles at N20,000 from the supermarket or withdrawing the cash at PoS for the purchase currently attracts 7.5% VAT + N50 EMTL + Transfer charge N20-N200 + SMS charge N6. All paid by the buyer.

“The new law by the Nigeria Revenue Service is now asking the same buyer to pay another 7.5 per cent, having paid VAT on the primary article. This is against logic. If VAT is a company tax, it may be assumed that NRS is taxing service providers, but VAT is a consumer tax. The same blunder the FIRS made on Stamp Duty charged to the receiver’s account for years, before transferring tax liability to the sender recently,” he states.

The implication of this, according to Fasasi, is that the NRS policy may push back the drive of financial inclusion, inhibit the Federal Government’s digital economy efforts and increase cash outside the banking system.

He informed that going forward, most Nigerians may resort to cash transactions to avoid the tax-prone electronic channels.

But in its response, NRS clarifies that VAT is only on charges collected by banks, not customers’ transactions.

NRS responded to reports suggesting that Value-Added Tax (VAT) has been newly imposed on banking services such as electronic transfers, fees and commissions.

In a statement made available to newsmen and signed by Dare Adekanmbi, Special Adviser on Media to the NRS chairman, Zacch Adedeji, the service said the claims were incorrect.

According to the NRS, VAT has always applied to banking services and was not introduced by the Nigeria Tax Act.

The statement explained: “The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard.

“The Nigeria Revenue Service (NRS) wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect.

“VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions under Nigeria’s long-established VAT regime. The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard.”

While urging Nigerians to ignore false reports, the NRS said: “The Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information.”

The NRS also clarified that VAT applies only where banks charge fees or commissions for services such as transfers, USSD usage, card issuance and account maintenance. (The Guardian)

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