The Nigeria Revenue Service (NRS) has dismissed widespread reports claiming that Value-Added Tax (VAT) has been newly imposed on banking services, electronic money transfers, fees, and commissions, describing such claims as false and misleading.
In a statement issued on Thursday in Abuja, Mr Dare Adekanmbi, Special Adviser on Media to the Executive Chairman of NRS, Dr Zacch Adedeji, clarified that VAT has always applied to certain banking services under Nigeria’s long-standing tax framework.
According to Adekanmbi, the Nigeria Tax Act did not introduce VAT on banking charges, nor did it create any new tax burden for bank customers.
“The Nigeria Revenue Service wishes to address and correct misleading narratives circulating in sections of the media suggesting that VAT has been newly introduced on banking services, fees, commissions, or electronic money transfers,” he said. “This claim is categorically incorrect.”
He explained that VAT has historically applied to fees, commissions, and charges for services rendered by banks and other financial institutions, and that this position remains unchanged under the Nigeria Tax Act.
Adekanmbi stressed that VAT is charged only on service fees, not on the actual amount of money transferred or withdrawn.
“For example, if a bank charges N10 as a transfer fee, VAT of 7.5 per cent—amounting to 75 kobo—applies only to that N10 charge, not to the funds being transferred,” he noted.
Addressing other concerns, he clarified that interest earned on savings accounts, fixed deposits, and similar accounts is not subject to VAT, as interest income does not qualify as a supply of goods or services under the Nigeria Tax Act, 2025.
He further reaffirmed that the Act explicitly exempts basic food items, essential goods, medical services, pharmaceutical products, and core educational services provided by recognised institutions from VAT, in line with existing policies aimed at easing the cost of living and ensuring access to essential services.
“What has changed is compliance and enforcement, not the law,” Adekanmbi said, adding that financial institutions are being reminded to remit VAT already charged and collected, as required by law.
He urged the public to disregard misinformation and rely solely on official communications from the NRS for accurate and up-to-date tax information.
“Claims suggesting that VAT has been newly introduced on savings, food, healthcare, education, or essential consumption are misleading and incorrect,” he said.
The NRS also released a set of Frequently Asked Questions (FAQs) to provide further clarity on VAT-related issues under the Nigeria Tax Act.
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