The Nigeria Revenue Service has dismissed reports claiming that Value Added Tax is being charged directly on bank transfers, clarifying that the 7.5 per cent VAT applies only to service fees charged by banks and not to the funds transferred by customers.

In a statement issued on Thursday, the revenue agency described recent media reports alleging the introduction of VAT on electronic transfers and other banking transactions as inaccurate and misleading.

The statement was signed by Dare Adekanmbi, Special Adviser on Media to the Chairman of the Nigeria Revenue Service, Zaccheus Adedeji.

According to the agency, VAT has long been applicable to banking services under Nigeria’s existing tax framework and was not introduced by the Nigeria Tax Act.

“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 statement said.

The service stated that claims suggesting VAT is now being charged on electronic money transfers, banking fees, or commissions are unfounded.

“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,” it said.

The NRS explained that service charges imposed by banks and other financial institutions have always attracted VAT under Nigeria’s established tax regime.

“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 statement added.

It further clarified that VAT is applied strictly to the service charge and not to the actual amount transferred or withdrawn by customers.

“VAT is not charged on the amount of money transferred or withdrawn. It applies only to the service charge or commission imposed by the bank,” the service said.

“For example, if a bank charges ₦10 for a transfer, VAT of 7.5 per cent, which is ₦0.75, applies to that ₦10 charge, not to the amount being transferred,” it added.

The Nigeria Revenue Service also reassured customers 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,” it said.

Addressing concerns over the rising cost of living, the agency emphasised that basic food items and other essential goods remain exempt from VAT.

“The Nigeria Tax Act expressly exempts basic food items and essential goods from VAT to protect consumers and reduce the cost of living,” the statement said.

The service added that essential medical services, pharmaceutical products, tuition, and core educational services provided by recognised institutions are also excluded from VAT.

Commenting on recent developments within the tax system, the NRS said the focus is on enforcement and compliance rather than the introduction of new tax obligations.

“What changed is compliance and enforcement, not the law. Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers,” it stated.

The agency maintained that the Nigeria Tax Act does not impose additional VAT burdens on Nigerians, particularly in sensitive areas such as savings, food, healthcare, and education.

“The Act did not introduce VAT on savings, basic food, medical care, education, or essential consumption. Claims suggesting otherwise are misleading and incorrect,” it said.

The Nigeria Revenue Service urged members of the public to ignore 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 disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information,” the statement added.