Starting Monday, January 19, it will cost more to send money in Nigeria. The Nigerian Revenue Service (NRS) has decided to impose a 7.5% Value Added Tax (VAT) on all mobile transfer fees. This change affects many Nigerians who use OPay, Moniepoint, and traditional banking apps for daily transactions like buying food and paying school fees.
This is part of the government’s 2025 Reform Agenda, marking a shift from fixed rates to taxes on services. Here’s what you need to know about how this will affect your wallet, the math involved, and why the government believes this is necessary.
It’s important to note, as NRS Chairman Zacch Adedeji explains, that the tax applies to the service fee, not the amount you send. If you send ₦100,000 to your landlord, the government does not take 7.5% of that amount (₦7,500). Instead, they tax the fee the bank charges you for the transfer. Here’s how your debit alert will look starting January 19:
| Component | Cost | Notes |
| Transfer Amount | ₦100,000 | The money reaching the receiver. |
| Bank/Fintech Fee | ₦50.00 | Standard charge for transfers above ₦50k. |
| Stamp Duty (EMTL) | ₦50.00 | The standard levy on receipts >₦10k. |
| The New VAT (7.5%) | ₦3.75 | Calculated on the ₦50 fee only. |
| Total You Pay | ₦100,103.75 | Up from the previous standard. |
Note: While ₦3.75 may seem negligible on a single transaction, the cumulative volume of billions of transfers annually makes this a massive revenue stream for the government.
Who is Affected?
This rule applies to:
- Mobile App Transfers: (like GTBank, Zenith, Kuda, etc.)
- USSD Codes: The simple codes used by many people without smartphones.
- POS Terminals: Local agents may pass this cost on to customers.
The Good News: Interest on savings and loans is not taxed. The focus is on “fee-based services.”
Why is this happening now?
The government is moving from oil to services. Chairman Adedeji has said it’s time to “tax prosperity” where it exists today, which is in digital transactions. As Nigeria’s digital payments grow rapidly, the government sees transaction fees as a new source of income. The idea is simple: if banks earn billions in fees, the government wants 7.5% of that.
Defenders of the policy are quick to point out regional comparisons. They argue that Nigeria’s 7.5% VAT is modest compared to Ghana, which recently wrestled with a much more controversial E-Levy of 1.5% on the transfer value (not just the fee) and maintains a higher general VAT rate of roughly 15%. By that metric, the NRS argues, Nigerian users are getting off lightly.
Small Charges Lead to Big Costs
People are feeling uneasy about new fees coming into effect. For many Nigerians, this seems like just another form of “multiple taxation.” First, there is the Transfer Fee. Next comes the Stamp Duty. Now, we have VAT on the fee.
POS operators are especially concerned. Chinedu, a POS agent in Ikeja, says, “Customers already complain about the N100 or N200 charges. If I have to add 7.5% VAT to my service charge, I will either need to raise my prices or absorb the loss. With the current economy, I cannot afford to take a loss.”
Starting January 19, look closely at your transaction receipts. You will see a new line item. It may seem small, just a few Nairas here and there, but in the bigger picture, these small amounts are expected to add up to billions for the Federation Account. The “cashless policy” moved us to digital payments; now, the taxman has introduced a fee for those channels.
