### New Tax Regulations: Nigeria to Implement 7.5% VAT on Digital Banking Services in 2026 Starting January 19, 2026, Nigeria will introduce a **7.5% Value Added Tax (VAT)** on various digital banking services, including mobile bank transfers and USSD transactions. This new tax is part of a broader initiative by the Federal Government aimed at increasing revenue from the rapidly growing digital banking sector. The decision has raised concerns among consumer groups and financial analysts regarding the potential financial strain on Nigerians, especially in a challenging economic environment. The VAT will apply to transactions exceeding ₦10,000, alongside a ₦50 stamp duty on such transactions, further increasing the cost of digital banking services for consumers [https://www.legit.ng/business-economy/industry/1692538-full-list-75-vat-50-stamp-duty-bank-fees-ll-pay-2026]. ### Breakdown of the New VAT Implementation 1. **Effective Date and Scope**: - The VAT will take effect on **January 19, 2026**. - It will apply to **mobile bank transfers**, **USSD transactions**, and **card issuance fees** [https://www.tv360nigeria.com/fg-orders-banks-fintechs-to-begin-7-5-vat-on-electronic-banking-services]. 2. **Government Directive**: - The Federal Government has mandated all banks and fintech companies to begin collecting and remitting this VAT [https://www.nigeriacommunicationsweek.com.ng/angst-as-fg-demands-7-5-percent-vat-on-mobile-bank-transfers-ussd]. - Notices have been sent to customers by various payment platforms, including Moniepoint, informing them of the upcoming charges [https://www.kanyidaily.com/2026/01/what-you-need-to-know-about-7-5-vat-imposed-on-bank-transfers-and-pos-transactions.html]. 3. **Consumer Impact**: - The introduction of this VAT is expected to increase the overall cost of digital banking services, which may lead to financial strain for many Nigerians [https://www.enews.com.ng/2026/01/just-in-nigerians-to-pay-7-5-vat-on-bank-transfers-ussd-transactions-from-january-19]. - Consumer groups have expressed concerns over the timing and implications of this tax, especially given the current economic climate [https://globalfinancialdigest.com/nigeria-orders-banks-fintechs-to-charge-7-5-vat-on-electronic-banking-services-from-january-2026]. ### Supporting Evidence and Data - **VAT Rate**: The new VAT rate is set at **7.5%**, which is a significant addition to existing banking fees. - **Transaction Threshold**: The VAT will apply to transactions over **₦10,000**, with a **₦50 stamp duty** also being introduced for these transactions [https://www.legit.ng/business-economy/economy/1692502-nigerians-pay-75-vat-mobile-bank-transfers-ussd-transactions]. - **Projected Revenue**: The cumulative effect of this VAT on billions of transactions annually could represent a substantial revenue stream for the government, despite the seemingly small percentage [https://innovation-village.com/nigeria-adds-7-5-vat-to-bank-and-fintech-transfer-fees-from-january-19]. ### Conclusion: Implications of the New VAT on Digital Banking In summary, the introduction of a **7.5% VAT** on digital banking services in Nigeria is poised to have significant implications for consumers and the financial sector. 1. **Increased Costs**: Consumers will face higher costs for mobile transfers and USSD transactions, which could lead to reduced usage of these services. 2. **Government Revenue**: The government aims to bolster its revenue through this tax, tapping into the growing digital banking market. 3. **Consumer Backlash**: There is potential for public outcry and pushback from consumer advocacy groups, which may influence future tax policies. The effectiveness of this VAT implementation will depend on how well it is communicated to the public and how it impacts consumer behavior in the digital banking landscape [https://globalupfront.com/2026/01/15/tinubus-tax-reforms-nigerians-to-pay-7-5-vat-on-mobile-bank-transfers-ussd-transactions-from-january-19].