In a statement made available to newsmen on Thursday, the agency said VAT has “always applied to banking services and is not newly introduced under the new tax law, the Nigeria Tax Act.”
The Nigeria Revenue Service (NRS) has dismissed claims that Value-Added Tax (VAT) has been newly imposed on banking services, including electronic money transfers, fees and commissions.
In a statement made available to newsmen on Thursday, the agency said VAT has “always applied to banking services and is not newly introduced under the new tax law, the Nigeria Tax Act.”
The statement, signed by Dare Adekanmbi, the Special Adviser on Media to NRS Chairman Zacch Adedeji, he explained that “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 NRS said it was issuing the clarification to counter “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,” adding that “this claim is categorically incorrect.”
The agency further stated that “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,” emphasizing that the new tax law did not change the VAT obligations of customers.
The NRS clarified that VAT applies only to service charges or commissions collected by banks, not the money being transferred or withdrawn.
“For example, if a bank charges ₦10 for a transfer, VAT of 7.5% (₦0.75) applies to that ₦10 charge — not to the amount being transferred,” the agency explained. Interest earned on savings accounts, fixed deposits, and similar accounts is not subject to VAT, as it is not considered a supply of goods or services under the Nigeria Tax Act, 2025.
The agency also stated that basic food items, essential goods, medical services, pharmaceutical products, and tuition fees remain exempt from VAT under the law, in line with longstanding policies to protect consumers and ensure access to healthcare and education.
Addressing recent developments, the NRS said, “What changed is compliance and enforcement, not the law. Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers, in line with the Nigeria Tax Act.”
The agency urged Nigerians to rely solely on official communications for accurate and authoritative tax information, warning that “claims suggesting otherwise are misleading and incorrect.”
This clarification from the revenue agency was as a result of the report of a notice sent to customers on Wednesday afternoon by Moniepoint which informed users of the impending implementation of the VAT regime on certain electronic banking charges.
According to the notice, the development is tied to a directive from tax authorities mandating financial institutions to begin VAT collection and remittance.
“We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice stated.
It added, “From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS) (formerly known as the Federal Inland Revenue Service).”
The company disclosed that the tax would apply to “certain banking services,” including “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”
However, Moniepoint clarified that not all banking-related transactions would attract the tax, noting that “services that DO NOT attract VAT include: interest on deposits and savings.”