From Jan 19, Nigerians will start paying 7.5% Value Added Tax (VAT) on bank transfer and USSD service charges following a new tax directive.
The tax will apply to charges on mobile bank transfers, USSD transactions and card issuance fees, following a directive from tax authorities to financial institutions.
This was disclosed in a notice sent to customers by Moniepoint on Wednesday. The company said it received an official instruction to begin collecting and remitting VAT on certain electronic banking charges.
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According to the notice, all banks, microfinance institutions and electronic money operators have been directed to comply with the new VAT rule starting from January 19.
Moniepoint explained that the tax will be collected on service charges only and not on the total amount being transferred.
The firm also clarified that interest earned on savings or deposits will not attract VAT.
“This is not a price increase by Moniepoint,” the company stated, adding that it is only acting in line with government regulations.
The VAT will be remitted to the Nigerian Revenue Service NRS, formerly known as the Federal Inland Revenue Service.
Customers were also informed that the VAT deductions will be clearly shown as a separate item on transaction receipts and account statements.
The new policy is expected to affect millions of Nigerians who rely daily on mobile banking apps and USSD services for money transfers and payments.
