The Nigeria Revenue Service (NRS) has dismissed reports claiming that Value Added Tax (VAT) has been newly introduced on banking services, describing the reports as misleading and inaccurate.
In a statement signed by the Special Adviser on Media to the NRS Chairman, Dare Adekanmbi, on behalf of the Executive Chairman, Zacch Adedeji, the Service clarified that VAT has always applied to fees, commissions and charges on banking services. It stressed that the Nigeria Tax Act did not introduce any new VAT obligation on bank customers.
The statement noted that misinformation circulating in some sections of the media had created unnecessary confusion among Nigerians.
According to the NRS, VAT has long been applicable to banking services such as electronic transfers, USSD charges, card issuance fees, account maintenance fees and other service-related charges where a fee or commission is involved.
“The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard,” the NRS said.
The Service explained that VAT is not charged on the actual amount of money transferred or withdrawn by customers, but only on the service charge imposed by banks.
“VAT is not charged on the amount of money transferred or withdrawn. It applies only to the service charge or commission imposed by the bank. For example, if a bank charges ₦10 for a transfer, VAT of 7.5 percent, amounting to ₦0.75, applies to that ₦10 charge and not to the amount being transferred,” the NRS added.
The NRS further clarified that interest earned on savings accounts, fixed deposits and similar bank deposits is not subject to VAT, as interest income does not qualify as a supply of goods or services under the Nigeria Tax Act, 2025.
It also reaffirmed that basic food items, essential goods, medical and pharmaceutical products, as well as educational services provided by recognised institutions, remain exempt from VAT under the Act.
Addressing public concerns, the Service stated that what has changed is not the law itself but the level of compliance and enforcement, noting that financial institutions are being reminded of their obligation to remit VAT already charged and collected from customers.
The NRS urged Nigerians to disregard false narratives and rely only on official communications for accurate and up-to-date information on tax matters, assuring the public that the Nigeria Tax Act did not introduce any new VAT burden on ordinary citizens.