NRS Clarifies VAT Policy on Bank Transfers After Public Confusion
The Nigeria Revenue Service (NRS) has dismissed widespread reports suggesting that a new Value Added Tax (VAT) is being imposed directly on bank transfers, describing such claims as false and misleading.
In a statement released on Thursday, the agency stressed that the 7.5% VAT applies only to service charges collected by banks, not the actual funds being transferred by customers.
“The Nigeria Revenue Service wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect,” the statement said.
Origin of the VAT Confusion
The misinformation emerged in early January 2026 following the implementation of the Nigeria Tax Act 2025.
Confusion intensified after several fintech platforms and commercial banks, including Moniepoint and OPay, sent compliance notices to customers.
The notices informed users that from January 19, 2026, financial institutions would begin collecting and remitting a 7.5% VAT on electronic banking service charges, such as transfer fees.
While the notices correctly stated that VAT applied only to transaction fees, typically ₦10 or ₦25 per transfer, the information quickly lost context once shared on social media.
How Misinformation Spreads Online
Viral posts on platforms such as X and WhatsApp falsely claimed that Nigerians would now pay VAT on the total amount transferred.
Some posts alleged that customers would lose ₦7.50 for every ₦100 sent, a narrative that gained traction amid rising living costs and heightened sensitivity around recent tax reforms. The misinformation was further amplified by influential commentators and digital news platforms before official clarification was issued.
NRS Responds to False Claims
The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji, clarified that the Nigeria Tax Act did not introduce any new VAT on banking services.
According to the agency, VAT on banking-related fees has always existed under Nigeria’s long-established VAT framework.
“VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions,” the NRS stated.
The Service emphasised that VAT is charged strictly on the cost of service, the commission or transaction fee—and not on the transferred amount itself.
Practical Example of How VAT Is Applied
To illustrate, the NRS explained that if a customer transfers ₦10,000 and the bank charges a ₦25 transaction fee, the 7.5% VAT is calculated only on the ₦25 fee.
This means the VAT payable would be ₦1.88, while the ₦10,000 principal remains unaffected.
No VAT on Interest Income
The NRS also reassured the public that interest earned on savings accounts, fixed deposits, and similar investments does not attract VAT.
“Interest income is not a supply of goods or services and therefore does not attract VAT under the Nigeria Tax Act,” the agency said.
Call for Public Caution
The revenue service urged Nigerians to disregard unverified reports and rely solely on official channels for accurate tax information.
“The Nigeria Revenue Service urges members of the public and all stakeholders to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information,” the statement added.
The clarification comes as digital banking and electronic transfers continue to play an increasingly central role in Nigeria’s economy, making accurate public understanding of financial charges critical.
