NRS Clarifies VAT Applies Only to Bank Service Charges, Not Transfers

FCT, Nigeria – The Nigeria Revenue Service (NRS) has debunked the imposition of Value-Added Tax (VAT) on banking services – including electronic money transfer, fees and commission.

Dispelling the misinfor­mation doing the rounds across several media platforms, he described the reports as incor­rect and misleading.

In a statement made available to newsmen on Thursday by Dare Adekanmbi, Special Advis­er on Media to the Nigeria Rev­enue Service (NRS) Chairman, Zacch Adedeji, NRS said VAT has always applied to banking services and is not newly intro­duced under the new tax law, the Nigeria Tax Act.

The statement clarified that “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 Nigeria Revenue Ser­vice (NRS) wishes to address and correct misleading narra­tives circulating in sections of the media suggesting that Val­ue Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect.

“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 Nigeria Tax Act did not introduce VAT on banking charges, nor did it im­pose any new tax obligation on customers in this regard.

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“The Nigeria Revenue Ser­vice urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information”.

The statement also included a list of Frequently Asked Ques­tions (FAQs) on VAT as it relates to the tax law in order to provide further clarity on other areas of concern to Nigerians.

Also in the statement is a detailed FAQ to dispel widespread misconceptions about Value Added Tax (VAT) under the Nigeria Tax Act, 2025, emphasising that recent chang­es target enforcement, not new taxes on everyday Nigerians.

Adekanmbi clarified key points stating that VAT applies only to service charges like bank transfer fees (e.g., 7.5% on a N10 fee, not the transfer amount it­self), USSD charges, card issu­ance, and account maintenance fees—obligations long embed­ded in Nigerian VAT law.

Interest on savings accounts and fixed deposits remains ex­empt, as it does not qualify as a supply of goods or services.

Essential items face no VAT burden such that basic food, medical and pharmaceutical products, and core educational services from recognised insti­tutions are explicitly exempted to safeguard consumers, health­care access, and living costs.