By Peter Adelowo
The Nigeria Revenue Service, NRS, has dismissed claims that the Federal Government has introduced a new Value Added Tax on banking services, saying no fresh tax has been imposed on bank transfers or customer funds.
In recent days, social media reports and online commentaries have suggested that electronic transfers, bank charges and commissions are now subject to VAT under the Nigeria Tax Act, 2025, triggering widespread concern among Nigerians.
However, the NRS says the reports are misleading and have created unnecessary panic, especially at a time when many citizens are already grappling with rising living costs.
Reacting to the development, the Technical Assistant on Broadcast Media to the Executive Chairman of the NRS, Arabinrin Aderonke Atoyebi, said VAT on banking services has existed for decades and was not introduced by the 2025 Tax Act.
She explained that VAT is charged only on service fees collected by banks and not on the actual amount of money transferred or withdrawn by customers.
According to her, when a customer transfers funds, the full amount reaches the recipient, while VAT is applied only to the bank’s transaction fee.
Atoyebi added that interest earned on savings accounts and fixed deposits remains exempt from VAT, while USSD banking attracts VAT only on the session fee.
She also reaffirmed that basic food items, essential goods, medical products and educational services remain exempt from VAT under the current tax laws.
The NRS attributed the recent public concern to renewed efforts by tax authorities to ensure that financial institutions remit VAT already collected, which may have created the false impression of a new tax.
The Service urged Nigerians to rely on verified information and avoid alarmist reports, stressing that the 2025 tax reforms do not impose any additional VAT burden on ordinary citizens.
