Nigerians will begin paying a 7.5 percent Value Added Tax (VAT) on mobile bank transfers and USSD transactions starting January 19, 2026, following a new directive backed by the Federal Government. The development marks a major shift in charges applied to everyday electronic banking services widely used across the country.

The directive was communicated to customers by digital banking platform Moniepoint, which informed users that VAT would henceforth be applied to applicable electronic transactions, including mobile app transfers and USSD payments. According to the notice, the charge aligns with existing tax laws and government policy on electronic services.

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Electronic transfers and USSD banking have become central to financial transactions in Nigeria, particularly among low- and middle-income earners and small businesses who rely on them for daily payments. The introduction of VAT on these services is therefore expected to have widespread impact across different segments of the population.

While the government has not yet issued a detailed public statement, the move is understood to be part of broader efforts to expand the tax net and boost non-oil revenue through the formal financial system. Financial institutions are expected to comply fully with the directive from the effective date.

The announcement has already sparked mixed reactions among Nigerians, with concerns over rising transaction costs and the cumulative burden of banking charges. Many customers are calling for clarity on how the VAT will be applied and whether exemptions will exist for low-value transactions.