15/01/2026
7.5% VAT on bank transfers explained
Big news about banks in Nigeria. From Jan 19, 2026, some banking services will now have a 7.5% tax called VAT. Let me explain it:
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This tax is not for everything. It will apply to things like:
Mobile bank transfers
USSD transactions *(like dial codes to send money)
Card issuance fees
But don’t worry! Some things won’t be taxed, like:
Interest on your savings or deposits
So, if your money is growing in your bank, no tax on that.
Banks aren’t making this tax. They are just collecting it for the government. It’s not a price increase by the bank.
The government says all banks, microfinance banks, and mobile money apps must start collecting this tax on Jan 19. Everyone has to follow this rule.
Let’s make it super easy with an example:
Imagine you send money using your bank and they charge ₦50 for the service.
The VAT is 7.5% of 50.
To calculate:
50 × 7.5 ÷ 100 = ₦3.75
So, you’ll pay:
Service charge: ₦50
VAT: ₦3.75
Total = ₦53.75
Did you get it?
When you check your bank statement, the VAT will be shown separately. You’ll see exactly how much was taken for tax.
Millions of Nigerians use mobile banking and USSD every day. This new tax will apply to many of those transactions. So, plan your money carefully!
To sum up:
Some bank services now have 7.5% VAT
Savings/interest are safe
Banks just collect, government gets the tax
Starts Jan 19, 2026
Easy peasy! Now you know how VAT works on bank transfers.
