The Nigeria Revenue Service (NRS) has dismissed circulating reports suggesting that the new Nigeria Tax Act introduced Value Added Tax (VAT) on banking services, including electronic money transfers, fees, and commissions. According to the agency, these reports are misleading, as VAT on banking services has long existed under Nigerian tax law and is not a recent addition.
In a statement issued on January 14, 2026, by Dare Adekanmbi, Special Adviser on Media to the NRS Chairman, the agency emphasized that the Nigeria Tax Act did not create any new VAT obligations for customers. “VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions,” the statement clarified.
The NRS also published a detailed Frequently Asked Questions (FAQ) guide to address public concerns. Key points include: VAT applies only to service charges, not the amount of money transferred or withdrawn; interest earned on deposits is exempt; and essential goods, education, and medical services remain VAT-exempt. The clarification aims to prevent confusion among Nigerians who may have misinterpreted media reports.
Experts say the confusion arose from recent enforcement and compliance reminders sent to financial institutions. While banks are being reminded to properly remit VAT already charged, the underlying law has not changed. This distinction ensures that ordinary Nigerians are not facing new tax burdens on routine banking or essential services.
The clarification follows the signing of four key tax reform bills by President Bola Tinubu in June 2025, including the Nigeria Tax Act and the Nigeria Revenue Service Establishment Bill. While some provisions became effective immediately in June, others came into force on January 1, 2026. The NRS urges the public to rely on official communications for accurate tax information and to disregard unverified media claims.
source: nairametrics