The Nigeria Revenue Service (NRS) has dismissed widespread claims that Value Added Tax (VAT) has been newly introduced on banking services, assuring Nigerians that account holders will not bear any additional tax burden beyond existing charges.
In a statement issued on Thursday, the NRS explained that VAT has always applied to banking service charges, including fees, commissions and electronic transfer costs, under Nigeria’s long-standing tax framework. The agency stressed that the Nigeria Tax Act, 2025 did not introduce any new VAT obligation on bank customers.
The clarification, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zacch Adedeji, was aimed at countering what the agency described as “misleading narratives” suggesting that VAT had been newly imposed on electronic money transfers and other banking 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,” the statement read.
According to the NRS, VAT applied only to service charges or commissions collected by banks, and not to the actual amount being transferred or withdrawn. For instance, if a bank charges ₦10 for a transfer, VAT of 7.5 per cent amounting to ₦0.75 applied only to that ₦10 service charge.
The agency further clarified that interest earned on savings accounts, fixed deposits and similar accounts remained VAT-exempt, as such earnings are not classified as goods or services under the law.
Reiterating consumer protections, the NRS confirmed that basic food items, essential goods, medical services, pharmaceutical products and tuition fees remain exempt from VAT, in line with existing policies.
“What has changed is compliance and enforcement, not the law,” the agency stated, noting that financial institutions are now being reminded to remit VAT already charged and collected from customers.
The clarification followed a recent notice issued by digital bank Moniepoint, informing customers that it would begin VAT collection on certain electronic banking charges from January 19, 2026, in line with directives from tax authorities. Moniepoint also confirmed that interest on deposits and savings would not attract VAT.
The NRS urged Nigerians to rely on official channels for accurate tax information, warned that contrary claims circulating in the media are “misleading and incorrect.”
