The Nigeria Revenue Service (NRS) has firmly dismissed circulating reports suggesting that Value Added Tax (VAT) has been newly imposed on banking services, fees, commissions, or electronic money transfers under the Nigeria Tax Act, describing such claims as "categorically incorrect" and misleading.
In an official statement issued today, the NRS clarified that VAT has long been applicable to fees, commissions, and other charges for services provided by banks and financial institutions under Nigeria's established VAT regime.
The statement emphasized that the Nigeria Tax Act introduced no new tax obligations on customers in this area.
"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," the release stated.The NRS further explained that VAT applies exclusively to the service charges imposed by banks , such as transfer fees, USSD transaction fees, card issuance fees, and account maintenance charges and not to the principal amount of money being transferred, withdrawn, or held in accounts.
For example, if a bank levies a ₦50 fee on a transaction, the 7.5% VAT would be calculated on that ₦50 fee only (resulting in an additional ₦3.75), not on the transferred sum itself.
Interest earned on savings, deposits, or similar accounts remains exempt from VAT, as it does not qualify as a taxable supply of goods or services.
The clarification comes amid widespread public confusion and media reports following directives to financial institutions to begin or ensure proper remittance of VAT on applicable service fees, with some implementation deadlines set for January 19, 2026.
Several banks and fintech platforms had notified customers of upcoming adjustments to comply with existing tax rules, which some interpreted as the introduction of a brand-new levy.
The NRS urged the public, media outlets, and all stakeholders to disregard misinformation and rely solely on official communications from the Service for accurate and up-to-date tax information.
The statement was signed on behalf of the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS), which was restructured under recent tax reform laws.
This development highlights ongoing efforts to ensure clear understanding of Nigeria's tax framework following the 2025 reforms, as the government seeks to enhance revenue collection without imposing undue new burdens on citizens.
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