NRS says 7.5% VAT applies only to service charges on bank transfers

The Nigeria Revenue Service (NRS) has officially cleared the air regarding widespread reports that a new Value Added Tax (VAT) is being charged directly on bank transfers. 

In a statement released on Thursday, the agency dismissed these claims as inaccurate and misleading, emphasising that the 7.5% tax applies exclusively to the service fees charged by banks, not the principal amount 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,” it said.

The wave of false reports started in early January 2026, following the implementation of the Nigeria Tax Act 2025. The confusion was triggered when several fintech platforms and commercial banks, including Moniepoint and OPay, sent out compliance notices to their customers. 

These emails informed users that, effective January 19, 2026, the institutions would begin the systematic collection and remittance of a 7.5% VAT on electronic banking charges.

While the notices correctly specified that the tax applied to fees (such as the ₦10 or ₦25 charged for a transfer), the information was quickly stripped of context as it hit social media. Viral posts on platforms like X (formerly Twitter) and WhatsApp misinterpreted the “7.5% VAT” as a direct levy on the total funds being moved. 

The panic was further amplified by influential social media commentators and certain digital news outlets that published “Breaking News” headlines suggesting that Nigerians would now lose ₦7.50 for every ₦100 sent. This narrative tapped into existing public anxiety over the rising cost of living and recent tax reforms, causing the false news to spread rapidly before the official clarification.

Zacch Adedeji, Executive Chairman of the Nigerian Revenue Service (NRS)

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NRS’s response to the misinformation

The statement, signed by Dare Adekanmbi, the Special Adviser on Media to the NRS Chairman, Zaccheus Adedeji, clarified that the Nigeria Tax Act did not introduce any new VAT on banking charges. 

Addressing the public’s concerns, the NRS explained that VAT on banking services has long been a part of Nigeria’s established tax framework. 

The agency noted that while recent media reports suggested a fresh tax obligation for electronic money transfers, such assertions are unfounded. 

“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.

According to the NRS, the tax is only levied on the cost of service, which is the commissions or transaction fees that financial institutions charge for processing a transfer. It further stated that the revenue service wanted to address and correct misleading narratives that suggested a policy shift was underway. 

Mr Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Nigeria

By realigning these facts, the NRS aims to reassure bank customers that their transferred funds remain untouched by this tax. 

For example, if a customer sends ₦10,000 and the bank charges a ₦25 fee for the transaction, the 7.5% VAT is calculated only on the ₦25 fee (amounting to ₦1.88), while the ₦10,000 principal remains intact. 

This clarification comes at a time when digital transactions are increasingly central to the Nigerian economy, ensuring that citizens are not misinformed about the nature of their banking costs.

The NRS 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. The NRS urged the public to disregard unverified reports and rely on official sources 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.

Read also: Zimbabwe commences 15% tax on payments to Bolt, inDrive, Netflix, and other digital platforms

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