The Nigeria Revenue Service has dispelled reports suggesting that Value Added Tax is being charged directly on bank transfers, stressing that the 7.5 per cent tax applies only to fees charged by banks for their services, not to the funds transferred by customers, TheMediaGood Newspaper reports.
According to a statement issued yesterday Thursday 15th January, the agency said recent media reports claiming that VAT is being newly imposed on electronic transfers and other banking transactions were inaccurate and misleading.
The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji, explained that VAT has long applied to banking services under Nigeria’s 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 revenue service, assertions 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 said.
The NRS noted that service charges imposed by banks and other financial institutions have always been subject to VAT under the existing tax regime.
“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,” the statement added.
It further clarified that VAT is applied strictly to the service charge and not to the actual sum transferred or withdrawn by customers. “VAT is not charged on the amount of money transferred or withdrawn. It applies only to the service charge or commission imposed by the bank,” the service said.
“For example, if a bank charges ₦10 for a transfer, VAT of 7.5 per cent, which is ₦0.75, applies to that ₦10 charge, not to the amount being transferred.”
The NRS also reassured customers that interest earned on savings accounts, fixed deposits, and similar investments does not attract VAT.
“Interest income is not a supply of goods or services and therefore does not attract VAT under the Nigeria Tax Act,” it said.
Responding to concerns about the rising cost of living, the agency emphasised that basic food items and other essential goods remain VAT-exempt.
“The Nigeria Tax Act expressly exempts basic food items and essential goods from VAT to protect consumers and reduce the cost of living,” the statement said.