Recent reports circulating on social media have sparked widespread conversation and concern among Nigerians about a proposed 7.5% Value Added Tax (VAT) on selected banking services, set to take effect from January 19, 2026. If implemented as reported, this move would mark a significant shift in how everyday financial transactions are charged across the country.

What Is Being Proposed?

According to the reports, Nigerians may soon begin paying VAT on certain electronic banking services, including:
• Mobile bank transfers
• USSD transactions
• Card issuance and related electronic banking fees

However, it is also stated that interest earned on savings and deposit accounts will remain exempt, meaning Nigerians will not be taxed on money earned from their savings.

The directive is said to come from the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS), instructing commercial banks, microfinance banks, and electronic money operators to begin collecting and remitting VAT on the affected services from the effective date.

Why This Matters?

For millions of Nigerians, mobile banking and USSD services are not luxuries, they are necessities. From daily transfers to bill payments and small business transactions, digital banking has become the backbone of financial activity, especially for the unbanked and underbanked.

Introducing VAT on these services means higher transaction costs, even if the individual charges appear small. Over time, these costs can add up, particularly for low income earners, small business owners, and individuals who rely heavily on frequent transfers.

Public Reactions:

Unsurprisingly, the news has triggered strong reactions online. Many Nigerians have expressed frustration, arguing that the policy could:
• Increase the cost of living
• Discourage the use of formal banking channels
• Push more people back toward cash-based transactions

The Bigger Picture:

Supporters of the move may argue that expanding the VAT base is a way for the government to increase revenue in a challenging economic climate. Critics, however, question whether taxing everyday banking services is the right approach, especially at a time when financial inclusion and digital adoption are being actively promoted.

There are also calls for greater clarity and official communication, as Nigerians await confirmation, detailed guidelines, and possible exemptions from relevant authorities.

If implemented, this policy will affect nearly everyone who uses digital banking in Nigeria. Whether it ultimately proceeds as reported or is reviewed following public feedback, one thing is clear: the conversation around banking costs and taxation in Nigeria is far from over.

We’ll continue to monitor developments and provide updates as more information becomes available.