The Nigeria Revenue Service (NRS) has dismissed claims that Value Added Tax (VAT) is now being charged directly on bank transfers, assuring Nigerians that the tax applies only to bank service charges, not to the money customers transfer.
In a statement released on Thursday, the agency described recent media reports suggesting a new VAT on electronic transfers and banking transactions as misleading and inaccurate.
The clarification was contained in a statement signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji. According to the agency, VAT has always applied to certain banking services under Nigeria’s tax system and was not introduced by the Nigeria Tax Act.
“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 statement said.
The NRS stressed that claims suggesting VAT is now being charged on electronic transfers, banking fees, or commissions are completely unfounded.
“The Nigeria Revenue Service wishes to correct misleading narratives circulating in some sections of the media suggesting that VAT has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect,” the agency stated.
According to the service, banks and other financial institutions have always been required to apply VAT to service-related charges such as fees and commissions.
“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,” it explained.
The NRS further clarified that VAT is charged only on the service fee, not on the amount of money being transferred or withdrawn.
“For instance, if a bank charges ₦10 as a transfer fee, VAT of 7.5 per cent amounting to ₦0.75 applies only to that ₦10 charge, not to the money being transferred,” the statement noted.
The agency also reassured Nigerians that interest earned on savings accounts, fixed deposits, and similar investments is not subject to VAT, as interest income does not qualify as a taxable supply under the law.
“Interest income is not a supply of goods or services and therefore does not attract VAT under the Nigeria Tax Act,” it said.
Addressing concerns about the rising cost of living, the NRS emphasised that basic food items and essential goods remain VAT-exempt.
“The Nigeria Tax Act expressly exempts basic food items and essential goods from VAT in order to protect consumers and reduce the cost of living,” the service explained.
It added that essential medical services, pharmaceutical products, tuition fees, and core educational services provided by recognised institutions are also excluded from VAT.
On recent changes in tax administration, the NRS clarified that the focus is on improving compliance and enforcement, not introducing new taxes.
“What has changed is compliance and enforcement, not the law. Financial institutions are simply being reminded of their existing obligation to remit VAT already charged and collected from customers,” the agency stated.
The service reiterated that the Nigeria Tax Act does not place additional VAT burdens on Nigerians, especially in sensitive areas such as savings, food, healthcare, and education.
“The Act did not introduce VAT on savings, basic food, medical care, education, or essential consumption. Any claims suggesting otherwise are misleading,” it said.
The NRS concluded by urging the public to ignore unverified reports and rely only on official sources for accurate tax information.
“The Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and rely exclusively on official communications for accurate, authoritative, and up-to-date tax information,” the statement added.
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