Nigerians to Pay 7.5% VAT on Mobile Bank Transfers, USSD Transactions From January 19

Nigerians will begin paying 7.5 percent Value Added Tax (VAT) on charges related to mobile bank transfers and USSD transactions starting from January 19, following the implementation of updated tax regulations by relevant authorities.

The new VAT charge will apply only to service fees and transaction charges imposed by banks and financial institutions, and not to the total amount transferred. This means customers will see the VAT reflected on the cost of carrying out the transaction, rather than on the money being sent or received.

Financial institutions are expected to automatically deduct the VAT at the point of transaction in line with existing tax laws. Customers using mobile banking apps, USSD codes, and other digital banking platforms may notice slight increases in transaction-related charges once the policy takes effect.

The development has sparked conversations among bank customers, particularly individuals and small business owners who rely heavily on digital banking for daily transactions. Many are calling for clearer communication from banks to ensure users fully understand how the charges will be applied.

Authorities have advised the public to stay informed and seek clarification from their respective banks regarding how the VAT will affect their transactions.