By Naomi Jeremiah

The Nigeria Revenue Service (NRS) has clarified that Value Added Tax (VAT) is not charged on the actual money transferred by bank customers, but only on the service fees or commissions charged by banks.

In a statement issued on Thursday, the NRS dismissed recent reports suggesting that VAT had been newly introduced on electronic transfers, banking fees, or commissions, calling such claims “inaccurate and misleading.”

The agency explained that VAT has long applied to banking service charges under Nigeria’s tax framework since 1993 and that no new tax obligation has been imposed on customers.

“For example, if a bank charges ₦10 for a transfer, the 7.5% VAT—₦0.75—applies to that ₦10 service charge, not to the money being transferred,” the NRS said.

The service also confirmed that interest earned on savings accounts, fixed deposits, and similar investments remains exempt from VAT, while essential goods, basic food items, medical services, and tuition fees are also excluded.

The NRS emphasized that recent efforts in the tax system focus on enforcing compliance by financial institutions, rather than introducing new taxes.

“The public should rely only on official communications for accurate and up-to-date tax information,” the statement concluded.