The Nigeria Revenue Service (NRS) has issued an official clarification debunking claims that Nigerians are now being charged Value Added Tax (VAT) on the full value of bank transfers.
In a statement released on Thursday, the agency said the circulating reports were inaccurate, stressing that the 7.5% VAT applies only to bank service charges, not to the amount customers transfer.
“The Nigeria Revenue Service wishes to address and correct misleading narratives suggesting that VAT has been newly imposed on banking services or electronic money transfers. This assertion is entirely false,” the agency stated.
What Triggered the Misunderstanding
The confusion began in early January 2026 following the implementation of the Nigeria Tax Act 2025.
Several fintech companies and commercial banks, including Moniepoint and OPay, sent notices to customers explaining that from January 19, 2026, they would begin collecting and remitting VAT on electronic banking charges.
Although the notices correctly stated that VAT would apply only to transaction fees, often ₦10 or ₦25 per transfer, the information was widely misinterpreted once it reached social media.
How the False Narrative Spread
Posts shared on platforms such as X and WhatsApp claimed that VAT would now be deducted from the total amount sent during transfers.
Some messages alleged that customers would lose ₦7.50 for every ₦100 transferred. This narrative spread rapidly, amplified by online influencers and some digital news outlets, amid public anxiety over rising living costs and recent fiscal reforms.
NRS Sets the Record Straight
The clarification was signed by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji.
According to the agency, the Nigeria Tax Act did not introduce any new VAT obligations on banking transactions. VAT on banking fees, it said, has always existed under Nigeria’s long-standing tax framework.
“VAT has consistently applied to fees, commissions, and service charges rendered by banks and other financial institutions,” the statement noted.
The NRS emphasised that VAT is calculated strictly on the service cost, not on the funds transferred.
How VAT Is Calculated on Transfers
To clarify further, the agency provided an example:
If a customer transfers ₦10,000 and the bank charges a ₦25 transaction fee, VAT is applied only to the ₦25.
At 7.5%, this amounts to ₦1.88 in VAT, while the ₦10,000 transfer remains unaffected.
Interest Income Remains VAT-Free
The NRS also reassured Nigerians that interest earned on savings accounts, fixed deposits, and similar financial instruments does not attract VAT.
“Interest income is not considered a supply of goods or services and therefore does not fall under VAT,” the agency said.
Advice to the Public
The revenue service urged Nigerians to ignore unverified reports and rely on official government communications for accurate tax information.
“Members of the public and stakeholders are advised to depend solely on official sources for reliable and up-to-date tax guidance,” the statement added.
The clarification comes as electronic banking continues to dominate Nigeria’s financial ecosystem, making accurate public understanding of banking charges increasingly important.
