In a statement released on Thursday, January 14, 2026, the NRS, through Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, described such reports as “incorrect and misleading.” According to the service, VAT has long applied to banking services under Nigeria’s existing tax framework, and the newly enacted tax law did not introduce any additional VAT obligations for customers.
NRS Statement on Banking VAT
Adekanmbi clarified that the Nigeria Tax Act did not create new VAT obligations on fees, commissions, or charges for banking services. The official statement reads:
“The Nigeria Revenue Service (NRS) wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect.
VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions under Nigeria’s long-established VAT regime. 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 Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information.”
Clarifying Frequently Asked Questions on VAT
To further address public concerns, the NRS included a FAQ section explaining VAT under the law:
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Q1: Is VAT charged on banking services?
Yes. VAT applies to commissions, fees, and charges for services rendered by banks, such as transfer fees, USSD charges, card issuance fees, and account maintenance fees. This has always been the case under Nigerian VAT law. -
Q2: Does VAT apply to the money I transfer or withdraw?
No. VAT is only applied to the service charge or commission, not the principal amount. For example, a ₦10 transfer fee attracts 7.5% VAT (₦0.75), not the amount being transferred. -
Q3: Is VAT charged on savings account interest or bank deposits?
No. Interest earned on savings, fixed deposits, and similar accounts is exempt from VAT, as interest is not considered a supply of goods or services. -
Q4: Are basic food items and essential goods subject to VAT?
No. Essential food items are explicitly exempt under the Nigeria Tax Act to protect consumers. -
Q5: Are medical and pharmaceutical products vatable?
No. Essential medical services and pharmaceutical products are VAT-exempt. -
Q6: Are educational services subject to VAT?
No. Tuition and core services provided by recognised educational institutions are exempt. -
Q7: What changed recently if VAT is not new?
The change is in compliance and enforcement. Financial institutions are being reminded to remit VAT already collected from customers, in line with existing law. -
Q8: Did the Nigeria Tax Act introduce any new VAT burden on ordinary Nigerians?
No. The Act did not impose VAT on savings, basic food, medical care, education, or essential consumption. Claims suggesting otherwise are misleading.
Background on the Tax Reforms
The clarification follows the signing of four key tax reform bills by President Bola Tinubu in June 2025. These include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. Some provisions of these laws took effect on June 26, 2025, while others commenced on January 1, 2026.
The NRS emphasized that reliance on official communications is crucial to prevent confusion and misinformation regarding tax obligations. By reiterating long-standing VAT rules, the agency aims to provide clarity to both financial institutions and customers, ensuring accurate understanding of tax responsibilities.