Nigeria Revenue Service has commenced enforcement of 7.5% value-added tax (VAT) on service charges linked to digital financial transactions, leading to higher fees across point-of-sale payments, electronic transfers, and USSD sessions.
The policy applies strictly to transaction service fees rather than the value of funds moved, increasing end-user costs by the prevailing VAT rate.
Financial institutions (banks, microfinance banks, and fintech operators) are required to apply the tax at the point of charge and remit proceeds in line with existing tax rules.
The enforcement reflects a broader push to standardise tax treatment across Nigeria’s rapidly expanding digital payments ecosystem.
Authorities say the measure aligns digital finance with other taxable services, strengthens revenue mobilisation, and improves compliance as electronic transactions become dominant in everyday commerce.
For consumers and small businesses, the change translates into marginally higher costs per transaction, particularly for high-frequency users of POS terminals and USSD channels.
Industry operators note that while the increase is incremental per transaction, cumulative effects may be felt by merchants and households that rely heavily on digital payments.
The development underscores the government’s focus on widening the tax base amid accelerating adoption of electronic payments, while the financial sector adjusts pricing structures to reflect the updated tax application.
