The Nigeria Revenue Service (NRS) has dismissed claims that the Federal Government has introduced Value Added Tax (VAT) on bank transfers and customer funds, clarifying that no new tax has been imposed on banking transactions.
The clarification follows widespread reports on social media and in some media outlets suggesting that electronic transfers, bank charges and commissions had been newly subjected to VAT under the Nigeria Tax Act, 2025.
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The reports sparked public concern amid rising living costs and economic pressures.
Reacting to the claims, the Technical Assistant on Broadcast Media to the Executive Chairman of the NRS, Arabinrin Aderonke Atoyebi, described the reports as misleading, stressing that VAT on banking service charges has been in existence for decades.
“VAT on banking services is not new. It was not introduced by the Nigeria Tax Act, 2025, and it does not represent an additional financial burden on bank customers,” Atoyebi said.
She explained that the confusion arose from a misunderstanding between service charges imposed by banks and the actual funds transferred by customers.
“VAT is not, and has never been, charged on the amount of money a customer transfers or withdraws. Rather, it applies strictly to the service fee imposed by the bank,” she said, adding that “this distinction is critical.”
According to her, when a customer makes a transfer whether ₦10,000 or ₦1 million the entire amount is credited to the recipient without any VAT deduction. VAT is charged only on the bank’s transaction fee.
“For instance, a ₦100,000 transfer may attract a ₦50 service charge. The VAT of 7.5 per cent applies only to that ₦50, amounting to ₦3.75, in addition to the statutory stamp duty,” she explained.
Atoyebi also clarified that VAT on USSD banking applies solely to the session fee, while interest earned on savings accounts and fixed deposits remains exempt, as such earnings do not qualify as taxable supplies under existing tax laws.
She further reaffirmed that essential goods and services remain outside the VAT net under the Nigeria Tax Act, 2025.
“Basic food items, essential goods, medical and pharmaceutical products, as well as educational services, remain firmly exempt,” she said, noting that the exemptions were deliberately retained to protect vulnerable citizens.
Addressing the recent spike in public concern, Atoyebi attributed it to renewed enforcement efforts by tax authorities.
“Financial institutions are being reminded of their obligation to remit VAT already charged and collected. This renewed focus has created the false impression of a new tax, when in reality, it is the implementation of an existing one,” she said.
The NRS reiterated that the 2025 tax reforms do not impose any additional VAT burden on ordinary Nigerians and urged the public to rely on verified information rather than what it described as “alarmist headlines.”
As debates over taxation continue, Atoyebi said attention should be focused on accountability and proper use of public funds.
“The task before us is not to fear taxation, but to demand that taxes already in place are administered fairly, communicated clearly, and used responsibly for national development,” she said.
