Nigerian Revenue Agency NRS Affirms VAT On Bank Charges, Claims Account Holders Won’t Pay Extra
January 15, 2026 | News
The Nigeria Revenue Service (NRS) has dismissed reports suggesting that Value Added Tax (VAT) has been newly imposed on banking services, including electronic transfers, fees and commissions.
In a statement issued on Thursday, the agency said VAT has “always applied to banking services and is not newly introduced under the new tax law, the Nigeria Tax Act.”
The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zacch Adedeji, clarified that the Nigeria Tax Act did not introduce VAT on banking charges nor impose any new tax obligations on 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 statement said.
The NRS explained that it issued the clarification to counter what it described as “misleading narratives” in sections of the media claiming that VAT had been newly introduced on banking services, fees, commissions or electronic money transfers.
According to the agency, VAT has long applied to fees, commissions and service charges imposed by banks and other financial institutions under Nigeria’s existing VAT framework, stressing that the new tax law did not alter customers’ VAT obligations.
The NRS further clarified that VAT is charged only on service fees or commissions collected by banks, not on the actual funds being transferred or withdrawn.
“For instance, if a bank charges ₦10 for a transfer, VAT of 7.5 per cent (₦0.75) applies to the ₦10 charge, not to the amount being transferred,” the agency explained.
It added that interest earned on savings accounts, fixed deposits and similar instruments is not subject to VAT, as such income is not classified as a supply of goods or services under the Nigeria Tax Act, 2025.
The agency also reiterated that basic food items, essential goods, medical services, pharmaceutical products and tuition fees remain exempt from VAT, in line with longstanding policies aimed at protecting consumers and ensuring access to healthcare and education.
Addressing recent developments, the NRS said the key issue was enforcement rather than a change in the law.
“What has changed is compliance and enforcement, not the law. Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers, in line with the Nigeria Tax Act,” the statement said.
The agency urged Nigerians to rely on official sources for accurate tax information, warning that claims suggesting a new VAT on banking services are “misleading and incorrect.”
The clarification followed a notice circulated on Wednesday by fintech company Moniepoint, which informed customers of the planned implementation of VAT on certain electronic banking charges.
In the notice, Moniepoint said the development was based on a directive from tax authorities requiring financial institutions to begin VAT collection and remittance.
“From Monday, 19 January 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (NRS),” the notice stated.
The company said the tax would apply to specific banking services, including electronic transfer fees, USSD transaction charges and card issuance fees, while noting that interest on deposits and savings would remain exempt from VAT.