The Federal Government has directed all banks and fintechs to collect and remit 7.5 per cent value-added tax VAT on certain electronic banking services, effective Monday, January 19, 2026, according to an email notice issued by payment platforms.

The VAT will apply to electronic banking charges, including mobile money transfers, USSD transaction fees, and card issuance fees, according to an email notice on Wednesday shared with customers by Moniepoint.

For example, if a bank charges N100 to make a transfer, the 7.5 per cent VAT will be applied to that service fee, not the money being sent.

“From Monday, January 19, 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (formerly known as the Federal Inland Revenue Service).

“VAT will apply to certain banking services that include electronic banking charges such as mobile banking fees (transfers), USSD transaction fees, and card issuance fees,” the email read.

Other operators are expected to issue similar notices to their customers in the coming days. Services that will remain exempt include interest earned on deposits and savings, meaning customers will not pay tax on the returns from their accounts.

The NRS, formerly known as the Federal Inland Revenue Service, has set the deadline to ensure that all commercial banks, microfinance banks, and electronic money operators comply with the collection and remittance requirement.

Moniepoint stressed that this is not a price increase but a statutory obligation. “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service,” the company said in a statement.

The move is part of the government’s broader efforts to standardise VAT collection on digital financial services and expand revenue generation amid Nigeria’s growing digital economy. VAT on banking transactions is not entirely new; the NRS is now enforcing uniform collection rules across all platforms, ensuring compliance across the sector.

Customers have been assured that the new tax will be clearly itemised, with the VAT shown separately on transaction statements and reports.

In December, several commercial banks informed customers that the N50 stamp duty would be deducted on electronic transfers of N10,000 and above, following the commencement of provisions of the new Tax Act.

The charge, previously known as the EMTL, has now been formally reclassified as stamp duty and will be applied as a one-off fee on qualifying electronic transfers.

As Nigeria embraces its new tax reform in 2026, the Federal Government has been advised that poor Nigerians should be given tax reprieve because they have a low per capita income.

This advice came from an Abia politician and a US-trained Medical Doctor, Chief Dr. John K. Nwadinobi, at his country home in Amaogwugwu in the Umuahia North LGA.

He said, “When it comes to the issue of taxation, even though initially Nigerians were under-taxed, this was because the federal taxation applied to only federal civil servants.

“But the best thing to do is to spread the taxation scheme so that everybody pays a token, like Pay As You Earn (PAYE). Then, if you don’t earn, in other countries, the federal government reimburses people with low income or no income, a certain amount. But anybody who is productive has to pay something”.

Nwadinobi argued that the process through which the tax reform came into being should have been more thorough.

He said, “Excessive taxation on industrialists can make them withdraw job provisions. These people have already provided jobs, and are they being taxed because they establish a business that provides jobs to Nigerians? Something that the Federal Government could not do.”

He noted that in Nigeria, more than 200 bank branches have been earmarked for closure due to recapitalization demand.

He said, “Why do we need to shut down banks? If you shut down a bank, you have laid down workers across the nation. It will affect the economy of the workers and their children and their wives. It will affect the economy of the people that transport them to the bank.

“The lady that sells in the restaurant they eat during lunch, the landlord that gives them where to live will be affected. Recapitalization or whatever they call it, is giving a dog a bad name to kill it”.

Nwadinobi noted that viable companies are no longer functional in the country, stating, “I am not in support of shutting down any bank. Capitalize them instead of saying recapitalization, which is giving a dog a bad name to kill it and shut down banks”.

On the issue of Nigeria becoming a one party state, the PDP stakeholder said, “It is the job of every politician to make sure he survives to the next term. Politicians do everything they can to win the same election, and at least complete eight years tenure, like for the President or for the governor. So what APC is doing is not wrong.

“They are making every effort to have people cross carpet to their own party. So it is upon the people, the other political parties, to make sure they cross or they don’t cross. It is a personal decision.

“One-party state will never work in Nigeria. If it is tried, some people will not find favour in that one-party state. They will surely break away. So one-party state will be a political confusion.

Speaking about Abia State Nwadinobi said, “I would not say because I am not in Labour Party, then I am blinded by what is so glaring in other states. Governor Alex Otti is performing. Up from inauguration till date, two years, he has done wonderfully. And that is my submission”.

The amount spent on the importation of refined petroleum products has dropped sharply by 54 per cent in two years, falling from $14.58bn in the first nine months of 2023 to $6.71bn in the corresponding period of 2025, according to data from the Central Bank of Nigeria’s Balance of Payments report.

It declined from $14.58bn in the first nine months of 2023 to $11.38bn in the corresponding period of 2024, before dropping further to $6.71bn within nine months of 2025.

This is according to a comparative analysis of the 2023 and 2024 full-year and the Q3 2025 Balance of Payments presentation, released by the CBN and reviewed by The PUNCH on Monday.

The figures obtained from the CBN documents showed a sustained moderation in fuel importation, with import bills declining year-on-year over the period under review.

The data revealed that Nigeria spent $11.38bn on refined petroleum product imports between January and September 2024, representing a $3.20bn or 21.9 per cent decline compared with $14.58bn recorded in the same period of 2023, pointing to a sharp contraction in foreign exchange outflows associated with refined petroleum products.

The downward trend accelerated in 2025, with fuel imports dropping further by $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year, marking the steepest year-on-year contraction in the period analysed.

Overall, the figures show that Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 than it did in the corresponding period of 2023, underscoring a significant easing of foreign exchange outflows linked to petroleum product imports.

The CBN data also showed a 41 per cent year-on-year decline in refined petroleum product imports by the third quarter of 2025, signalling early signs of import substitution as new and rehabilitated refineries scale up operations.

The PUNCH reports that Nigeria’s reduced foreign exchange spending on imports comes against the backdrop of a series of structural reforms and market adjustments aimed at easing pressure on the country’s external reserves and stabilising the naira.

For decades, Nigeria relied heavily on imports, particularly refined petroleum products, due to limited domestic productive capacity, weak industrial output, and chronic underinvestment in critical infrastructure. This dependence made import financing one of the largest drains on foreign exchange earnings.

The removal of petrol subsidies in 2023 marked a major turning point, as higher pump prices curbed fuel consumption and reduced arbitrage-driven demand. The policy shift, combined with stricter foreign exchange management by the Central Bank of Nigeria, helped moderate import volumes and limit speculative FX demand linked to fuel importation.

Another key factor has been the gradual expansion of domestic supply, especially in the downstream oil sector. Energy experts also say competition within the market has intensified as marketers struggle to compete with supply from the $20bn Dangote Petroleum Refinery in Lekki.

Despite the decline, Nigerian fuel-importing marketers still spent an estimated $6.71bn importing refined products during the review period, underscoring the country’s continued dependence on foreign fuel supplies, despite repeated assurances that domestic refining would significantly curb imports.

Although the quarterly fuel import bill declined consistently, the data highlighted persistent structural weaknesses in the downstream oil sector.

Experts speak

Commenting, renowned energy economist Professor Wumi Iledare, noted that Nigeria’s reliance on imported petrol has declined but has not been eliminated. He also warned against claims that fuel importation has ended following increased domestic supply from the Dangote Petroleum Refinery.

In a personal note titled “Dangote Refinery, Petrol Imports, and Market Reality,” Iledare said recent assertions that Nigeria no longer imports petrol reflect “understandable optimism” but overstate the economic reality of the downstream oil market.

“Recent claims that petrol importation into Nigeria has ended because Dangote Refinery now meets domestic demand reflect understandable optimism, but they overstate economic reality.

“Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal reliance on imported petrol. However, neither Dangote Refinery nor petroleum marketers determine national supply outcomes,” he said.

Iledare, who also serves as Executive Director of the Emmanuel Egbogah Foundation, Abuja, acknowledged that the Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal dependence on imported petrol.

However, he stressed that neither the refinery nor petroleum marketers determines national supply outcomes. According to him, Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are shaped by the option to import, rather than the physical presence of imported cargoes.

“Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are disciplined by the option to import, not merely the act of importing.

“Even when no petrol cargoes are landing, the credible threat of imports remains the market anchor. Importation also continues to serve as a risk-management tool for stock security, demand surges, logistics disruptions, and refinery operational risks,” Iledare said, adding that importation continues to function as a risk-management tool for stock security, demand surges, logistics disruptions and refinery operational risks.

The energy economist further noted that the Petroleum Industry Act entrenches liberalisation and competition in the downstream sector, leaving no room for discretionary declarations that petrol imports have ended.

“The PIA does not permit discretionary declarations that imports have ended. Sustainable price stability and energy security arise from market discipline, infrastructure efficiency, foreign exchange liquidity and regulatory credibility, not announcements,” he said.

Iledare argued that the appropriate policy narrative should focus on reduced marginal import dependence, rather than import elimination, warning that imprecise language could undermine policy credibility.

“The correct policy framing, therefore, is reduced marginal import dependence, not import elimination. Precision in language matters, because credibility in energy policy is built on economic fundamentals, not celebratory headlines,” he added.

Also speaking on the subject, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, described the development as a major shift in Nigeria’s downstream oil market, citing the growing impact of local refining.

“That’s a significant drop. A 54 per cent reduction in fuel import spending in just two years signals increased local production, largely championed by the Dangote Petroleum Refinery,” Olatide said.

He noted that the refinery’s reported supply of over 50 million litres of petroleum products daily into the Nigerian market aligns with recent Central Bank of Nigeria data, which show a sharp moderation in refined fuel imports.

According to him, the combination of expanding local refining capacity and residual imports is gradually strengthening Nigeria’s energy security.

“The 50 million litres daily supply of petroleum products into the Nigerian market, according to Dangote Refinery, correlates with the CBN reports. Nigeria is gradually becoming an energy secure country with the combination of local refining and imports,” Olatide asserted.

Further analysis

Further analysis of the quarterly data from the BoP report showed that refined fuel imports stood at $3.26bn in Q1 2025, before declining to $1.80bn in Q2 and $1.65bn in Q3, reflecting a steady moderation across the year.

However, Nigeria’s overall import bill continued to rise during the period. Total imports increased from $9.20bn in Q1 to $9.62bn in Q2 and $10.30bn in Q3, driven largely by non-oil imports, which climbed to $7.08bn in the third quarter.

On the export side, earnings from crude oil, gas, and refined petroleum products improved, rising to $13.05bn in Q3 from $11.25bn in Q1, supported mainly by crude oil exports, which stood at $8.45bn in the third quarter.

Gas exports, however, fell sharply, declining by 30.21 per cent quarter-on-quarter and 20.07 per cent year-on-year, due to infrastructure constraints and global market pressures.

The sustained spending on refined fuel imports comes amid the Federal Government’s long-standing push for energy self-sufficiency.

While recent data suggest that fuel imports are beginning to moderate, analysts say Nigeria’s transition to full self-sufficiency will remain incomplete until domestic refineries operate consistently at scale and meet local demand.