Nigeria Revenue Service has dispelled reports suggesting that Value Added Tax is being charged directly on bank transfers
It stressing that the 7.5 per cent tax applies only to fees charged by banks for their services, not to the funds transferred by customers.
According to a statement today by the agency said recent media reports claiming that VAT is being newly imposed on electronic transfers and other banking transactions were inaccurate and misleading.
The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji, explained that VAT has long applied to banking services under Nigeria’s tax framework and was not introduced by the Nigeria Tax Act.
According to the statement, Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard.
The revenue service, asserted that VAT is now being charged on electronic money transfers, banking fees, or commissions are unfounded.
The NRS noted that service charges imposed by banks and other financial institutions have always been subject to VAT under the existing tax regime.
It further clarified that VAT is applied strictly to the service charge and not to the actual sum transferred or withdrawn by customers.
The NRS also reassured customers that interest earned on savings accounts, fixed deposits, and similar investments does not attract VAT.
Responding to concerns about the rising cost of living, the agency emphasised that basic food items and other essential goods remain VAT-exempt.
It said Nigeria Tax Act expressly exempts basic food items and essential goods from VAT to protect consumers and reduce the cost of living.
The statement added that essential medical services, pharmaceutical products, tuition, and core educational services offered by recognised institutions are also excluded from VAT.
On recent developments in the tax system, the NRS said the emphasis is on enforcement rather than the creation of new tax obligations.
The service maintained that the Nigeria Tax Act does not impose additional VAT burdens on Nigerians, particularly in sensitive areas such as savings, food, healthcare, and education.
The NRS urged the public to disregard unverified reports and rely on official sources for accurate tax information.
