If you received an email from Moniepoint or OPay yesterday, it likely caused some worry. The email made it seem like the government had created a new way to tax your transfers starting January 19.
Various news outlets, including ours, reported on this issue. However, the Nigeria Revenue Service (NRS) clarified today: the law isn’t new; they are just enforcing it now. In the midst of confusion and anger, it’s important to understand the difference between the big news and the details. Here is what the NRS confirmed about changes to your bank transfers.
It Is Not a New Law
The issue began when fintech companies sent out messages about a “government-backed regulatory change.” Many people thought this meant a new tax was part of the 2025/2026 Tax Act.
However, in a recent press statement, the NRS (formerly FIRS) addressed this misunderstanding.
“VAT has always applied to banking services and is not newly introduced under the new tax law, the Nigeria Tax Act,” the statement read.
What does this mean?
In simple terms, VAT on banking fees has been the rule since 2020 (Finance Act 2019).
- Traditional Banks (GTB, Zenith, First Bank): Have largely been charging this for years. If you look closely at your old receipts, you might see “VAT on Commission.”
- Fintechs (OPay, Moniepoint, etc.): Many of these newer platforms were either covering this cost or working around the rules to keep transaction fees low for you.
The key takeaway is that the government has closed the loophole. Now, all companies, including fintechs, must collect and pay this tax. This is not a new rule; it just ends the “grace period.”
See Exactly How Much They Will Deduct
Some people fear that the government is taxing your money. They are not. The NRS has confirmed this: “VAT is not charged on the amount of money transferred or withdrawn. It applies only to the service charge.”
If you transfer ₦50,000 to your mother:
- Old Way: You pay a ₦20 fee.
- New Way (Jan 19): You pay ₦20 fee + ₦1.50 VAT (7.5% of ₦20).
- Total Debit: ₦50,021.50.
You are paying an extra ₦1.50, not an extra ₦3,750.
Is Your Main Money Safe?
This situation highlights a communication gap in our financial system. When “Compliance” is framed as “New Regulation,” panic spreads. The Good News is that your savings, interest, and the amount you transfer stay the same. However, there’s some bad news that transaction costs are rising for fintech users who enjoyed lower fees. This change is a normal adjustment, not a sudden attack on your money.
Conclusion
At Innovation Village, we prioritise accuracy. Our first report reflected early bank notifications, but we strive to provide deeper insights. So, on January 19, when you see that extra charge on your receipt, don’t panic. It’s not a new law; it’s just the taxman finally adjusting to the fintech world.
