The Nigeria Revenue Service (NRS) has moved swiftly to quell rising public apprehension, categorically dispelling reports suggesting the introduction of a new Value-Added Tax (VAT) on banking services and electronic transfers.
In a formal statement issued on Thursday, Mr Dare Adekanmbi, Special Adviser on Media to the NRS Executive Chairman, Dr Zacch Adedeji, characterised the circulating narratives as “incorrect and misleading.” He clarified that the levies in question are not a fresh imposition under the Nigeria Tax Act 2025, but rather a continuation of a long-established fiscal regime.
Addressing the core of the public’s concerns, Mr Adekanmbi emphasised that VAT has historically applied to the fees, commissions, and charges levied by financial institutions for their services.
“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 stated. He further noted that the current focus of the Service is directed towards “compliance and enforcement” rather than the creation of new tax burdens. Financial institutions, he remarked, are simply being reminded of their existing statutory obligations to remit VAT already collected from their clientele.
To provide further clarity, the NRS provided a breakdown of how the tax is applied to everyday transactions:
- Service Fees: VAT at the rate of 7.5 per cent applies only to the bank’s service charge. For instance, on a transfer fee of ₦10, the VAT incurred is ₦0.75.
- The Principal: Crucially, VAT is not charged on the actual sum of money being transferred or withdrawn.
- Interest Income: Interest earned on savings, fixed deposits, and similar accounts remains exempt from VAT, as interest income does not constitute a “supply of goods or services.”
In a bid to reassure the citizenry amidst economic shifts, the NRS underscored the robust exemptions embedded within the Nigeria Tax Act 2025. Designed to protect the most vulnerable and manage the cost of living, the following remain VAT-exempt:
- Basic Commodities: Essential food items and primary consumer goods.
- Healthcare: Essential medical services and pharmaceutical products.
- Education: Tuition and core services provided by recognised educational institutions.
Mr Adekanmbi concluded by urging stakeholders and the general public to disregard misinformation and rely exclusively on official NRS communiqués for authoritative tax information. The Service has also released a comprehensive list of Frequently Asked Questions (FAQs) to provide further transparency on the nation’s evolving tax landscape.
