VAT on banking fees is not new, NRS clarifies

The Nigeria Revenue Service (NRS) on Thursday clarified that Value Added Tax (VAT) on banking fees was not introduced by the Nigeria Tax Act, stressing that VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions.

The VAT will apply to electronic banking charges, including mobile money transfers, USSD transaction fees, and card issuance fees.

In a statement issued, the NRS said it was responding to misleading narratives circulating in sections of the media suggesting that VAT has been newly introduced on banking services, fees, commissions, or electronic money transfers.

“This claim is categorically incorrect,” the agency said.

According to the NRS, “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 further explained that “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 government revenue agency, however, urged members of the public and all stakeholders to disregard misinformation and rely exclusively on official communications for accurate and up-to-date tax information.