The Nigeria Revenue Service (NRS) issued a strong clarification on Thursday, January 15, 2026, stating that Value-Added Tax (VAT) on banking services is not a new introduction. Following widespread reports and social media confusion suggesting that the Nigeria Tax Act had imposed a fresh 7.5% tax on transfers, the NRS emphasized that VAT has “always applied” to fees, commissions, and charges for services rendered by financial institutions. The agency noted that current compliance efforts are simply enforcing long-established tax laws rather than creating new burdens for citizens.
NRS spokesperson Dare Adekanmbi explained that the tax applies only to the service charge imposed by the bank, not the actual amount of money being transferred or withdrawn. For instance, if a bank charges N10 for a transfer, the 7.5% VAT (N0.75) is applied only to that N10 fee. He further clarified that interest earned on savings accounts, fixed deposits, and other deposit accounts remains entirely exempt from VAT, as interest income is not classified as a supply of goods or services under the current tax regime.
The clarification aims to quell growing public anxiety fueled by notifications from fintech platforms like Moniepoint, which recently updated their terms to reflect VAT remittances. The NRS urged stakeholders to disregard “misleading narratives” and rely on official communications for accurate tax information. The agency stressed that essential goods, basic food items, and educational services also remain VAT-exempt under the Nigeria Tax Act to protect low-income consumers and reduce the overall cost of living.
