The Nigeria Revenue Service (NRS) has moved to debunk rumors circulating regarding the implementation of Value-Added Tax (VAT) on banking services, such as electronic transfers, commissions, and service fees.
In a statement released in Abuja on Thursday, Mr. Dare Adekanmbi, the Special Adviser on Media to the NRS Executive Chairman, Dr. Zacch Adedeji, characterized these reports as inaccurate and deceptive.
Adekanmbi clarified that VAT on banking services is not a fresh development under the Nigeria Tax Act.
He stated, “The Nigeria Revenue Service (NRS) 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 further asserted that “this claim is categorically incorrect,” noting that “VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions under Nigeria’s long-established VAT regime.”
The NRS emphasized that the current legislation did not create new burdens for bank customers. According to Adekanmbi, “The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard.”
He explained that the tax applies only to the bank’s service fee—such as transfer fees, USSD charges, or account maintenance fees—rather than the actual money being moved. “It applies only to the service charge or commission imposed by the bank,” he noted, providing an example: “For example, if a bank charges N10 for a transfer, VAT of 7.5 per cent (N0.75) applies to that N10 charge, not to the amount being transferred.”
Furthermore, the NRS highlighted several key exemptions to protect the public’s purchasing power.
Adekanmbi confirmed that interest earned on savings or fixed deposits does not attract VAT, as it is not considered a supply of goods or services.
He also noted that the Nigeria Tax Act, 2025, continues to exempt basic food items, essential medical services, pharmaceutical products, and tuition fees. “These exemptions are clearly listed under the VAT exemption provisions of the Act,” he said, adding that “tuition and core educational services provided by recognised educational institutions are exempt from VAT under the Act.”
Ultimately, the spokesperson clarified that while the law remains the same, the focus has shifted toward ensuring financial institutions fulfill their duties.
“Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers, in line with the Nigeria Tax Act,” he stated.
He concluded by reiterating that “the Act did not introduce VAT on savings, basic food, medical care, education, or essential consumption,” and that any “claims suggesting otherwise are misleading and incorrect.”
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