Nigeria Revenue Service Denies new VAT on Bank Accounts
Last update: January 15, 2026
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NRS says reports on VAT deduction on bank accounts false...
Nigeria’s Revenue Service (NRS) has dismissed media reports claiming that value-added tax (VAT) had been newly imposed on banking services, saying the information was incorrect and misleading.
In a statement, Dare Adekanmbi, special adviser on media to NRS Executive Chairman Zacch Adedeji, said VAT had always applied to fees, commissions and charges for services rendered by banks and other financial institutions.
He said the Nigeria Tax Act did not introduce VAT on banking services such as electronic money transfers, nor did it impose any new tax obligations on customers.
“VAT has always applied to fees, commissions and charges under Nigeria’s long-established VAT regime,” Adekanmbi said, urging the public to rely on official communications for accurate tax information.
He said VAT applies only to service charges, including transfer fees, USSD charges, card issuance fees and account maintenance fees, and not to the amount of money transferred or withdrawn.
According to him, this has always been the position under Nigerian VAT law, and was not introduced by the Nigeria Tax Act.
He said that VAT was not charged on the amount of money transferred or withdrawn.
“It applies only to the service charge or commission imposed by the bank.
“For example, if a bank charges N10 for a transfer, VAT of 7.5 per cent (N0.75) applies to that N10 charge, not to the amount being transferred,” he said.
He said that interest earned on savings accounts, fixed deposits, and similar deposit accounts was not subject to VAT.
He said that interest income was not a supply of goods or services and therefore did not attract VAT under the Nigeria Tax Act, 2025.
Interest earned on savings accounts and fixed deposits is not subject to VAT, he added, while basic food items, essential medical services, pharmaceuticals and core educational services remain exempt.
“What has changed is compliance and enforcement, not the law,” Adekanmbi said, adding that financial institutions were being reminded of their obligation to remit VAT already charged and collected from customers.
