NRS denies new VAT on banking services, calls reports “misleading”

The Nigeria Revenue Service (NRS) has moved to dispel widespread reports claiming the imposition of a new Value-Added Tax (VAT) on banking services, including electronic transfers, fees, and commissions.

Mr. Dare Adekanmbi, Special Adviser on Media to the NRS Executive Chairman, Dr. Zacch Adedeji, described the reports as incorrect and misleading in a statement issued in Abuja.

He clarified that VAT has always applied to banking services and was not newly introduced under the recent Nigeria Tax Act.

“The Nigeria Revenue Service wishes to address and correct misleading narratives… suggesting that VAT has been newly introduced on banking services. This claim is categorically incorrect,” Adekanmbi stated.

“VAT has always applied to fees, commissions, and charges for services rendered by banks… The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers.”

He urged the public and stakeholders to disregard the misinformation and rely solely on official NRS communications for accurate tax information.

The statement included a list of Frequently Asked Questions to provide further clarity.

In the FAQs, Adekanmbi detailed that VAT applies to service charges like transfer fees, USSD charges, card issuance fees, and account maintenance fees, but not on the principal amount of money being transferred or withdrawn.

He gave an example: if a bank charges ₦10 for a transfer, VAT of 7.5% (₦0.75) applies only to that ₦10 charge.

The clarification further outlined several key exemptions under the law, confirming that VAT is not charged on: interest earned on savings and deposit accounts, basic food items and essential goods, essential medical services and pharmaceutical products, tuition and core educational services from recognized institutions.

Adekanmbi emphasized that the recent focus represents a change in compliance and enforcement, not the law itself. “Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers,” he said, concluding that claims of new taxes on essentials are “misleading and incorrect.”

About The Author

Dele Fashomi

Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93.

Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism.

He had done many courses in communication, including the EU-BBC Editing Course in 2002.

Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013).

He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers.

He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 – 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 – 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor.

Dele Fashomi is now the Publisher/Editor-in-Chief of Newstide247.com newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye – DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography – AGAINST ALL ODDS. There are many other books in the works under his pen.

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