The Nigeria Revenue Service has clarified that Value Added Tax is not charged on bank transfers, stating that the 7.5 per cent VAT applies strictly to service fees imposed by banks and not to the money transferred by customers.
In a statement issued on Thursday, the agency dismissed reports suggesting that VAT was newly introduced on electronic transfers and other banking transactions, describing such claims as misleading.
The statement, signed by the Special Adviser on Media to the NRS Chairman, Dare Adekanmbi, explained that VAT has always applied to banking services under Nigeria’s existing tax framework and was not introduced by the Nigeria Tax Act.
According to the service, banks have long been required to charge VAT on fees, commissions, and service charges for services rendered, adding that the law has not changed in this regard.
The NRS stressed that VAT is calculated only on the service charge and not on the actual amount transferred or withdrawn. It explained that where a bank charges a transfer fee, VAT is applied solely to that fee.
The agency also clarified that interest earned on savings accounts, fixed deposits, and similar investments does not attract VAT, as interest income is not regarded as a supply of goods or services under the law.
Addressing public concerns about rising living costs, the service reassured Nigerians that basic food items and other essential goods remain exempt from VAT. It added that essential medical services, pharmaceutical products, tuition, and core educational services provided by recognised institutions are also excluded.
The NRS noted that recent efforts focus on improving compliance and enforcement rather than introducing new taxes. It urged the public to rely on official sources for accurate tax information and disregard unverified reports.
