The Nigeria Revenue Service (NRS) has denied reports suggesting that Value Added Tax (VAT) is being charged directly on bank transfers, clarifying that the 7.5 per cent VAT applies only to bank service charges, not to the actual funds transferred by customers.
In a statement issued on Thursday, the NRS described recent media reports claiming that VAT had been newly imposed on electronic transfers and banking transactions as inaccurate and misleading.
The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji, explained that VAT has long been applicable to banking services under Nigeria’s existing tax framework 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.
According to the NRS, claims that VAT is now being charged on electronic money transfers, banking fees, or commissions are unfounded.
“The Nigeria Revenue Service wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect,” it added.
The agency stressed that service charges imposed by banks and other financial institutions have always been subject to VAT under Nigeria’s long-established tax regime.
“VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions,” the statement noted.
The NRS further clarified that VAT is applied only to the service charge, not to the amount of money transferred or withdrawn by customers.
“VAT is not charged on the amount of money transferred or withdrawn. It applies strictly to the service charge or commission imposed by the bank,” the agency said.
“For instance, if a bank charges ₦10 for a transfer, VAT of 7.5 per cent—amounting to ₦0.75—applies to the ₦10 charge, not to the sum being transferred.”
The service also reassured Nigerians that interest earned on savings accounts, fixed deposits, and similar investments does not attract VAT, noting that interest income does not qualify as a supply of goods or services under the Nigeria Tax Act.
Addressing concerns about the rising cost of living, the NRS emphasised that basic food items and essential goods remain VAT-exempt, in line with provisions of the law aimed at protecting consumers.
“The Nigeria Tax Act expressly exempts basic food items and essential goods from VAT to reduce the burden on citizens,” it said.
It added that essential medical services, pharmaceutical products, tuition, and core educational services provided by recognised institutions are also excluded from VAT.
On recent tax developments, the NRS explained that the focus is on compliance and enforcement, not the introduction of new taxes.
“What has changed is enforcement, not the law. Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers,” the statement said.
The agency reiterated that the Nigeria Tax Act does not impose additional VAT burdens on Nigerians, particularly in sensitive areas such as savings, food, healthcare, and education, and urged the public to ignore unverified reports.
“The Nigeria Revenue Service urges members of the public to disregard misinformation and rely solely on official communications for accurate and up-to-date tax information,” the statement concluded.
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