As NRS Quells Fears Over VAT On Bank Charges

The Nigeria Revenue Service (NRS) has moved to clarify widespread public concerns over the alleged introduction of Value Added Tax (VAT) on banking services, insisting that no new tax has been imposed on customers’ transactions under the recently enacted Nigeria Tax Act.

In a statement issued on Thursday, the NRS described reports suggesting that VAT had been newly introduced on banking charges—such as electronic money transfers, fees and commissions—as misleading and inaccurate.

The agency stressed that VAT has long applied to certain banking services under Nigeria’s existing tax framework.

Signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zacch Adedeji, the statement explained that the Nigeria Tax Act did not alter the VAT treatment of banking services or introduce additional tax obligations for bank customers.

“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, pushing back against what it described as “misleading narratives” circulating in parts of the media.

According to the revenue agency, VAT has historically applied to fees, commissions and charges for services rendered by banks and other financial institutions, in line with Nigeria’s long-established VAT regime.

These charges, it noted, are distinct from the principal amounts involved in financial transactions, which are not subject to VAT.

“The Nigeria Revenue Service 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 statement read.

The clarification comes amid heightened public sensitivity around tax policy and cost-of-living pressures, with many Nigerians expressing concern that new or expanded taxes could further increase the cost of everyday financial transactions. Social media discussions and some media reports had suggested that the Nigeria Tax Act paved the way for fresh VAT charges on routine banking activities.

However, the NRS maintained that the legal position remains unchanged, stressing that the Nigeria Tax Act merely consolidates and modernises existing tax provisions without introducing VAT on banking services where none previously existed.

In a bid to further address public concerns and prevent confusion, the revenue service said it is addressing all areas of concerns on the new tax laws, and promised a smooth implementation of the laws.

The NRS clarifications are designed to provide clarity on how VAT applies across different sectors of the economy and to address recurring questions from taxpayers.

The NRS also urged Nigerians, businesses and other stakeholders to rely on official sources for accurate and up-to-date tax information, warning that misinformation could undermine public understanding of tax obligations and compliance.

“The Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information,” the statement added.

As the Nigeria Tax Act begins to shape tax administration and compliance going forward, the NRS said it remains committed to transparency, taxpayer education and constructive engagement with the public to ensure clarity around fiscal policies and their implementation.