The Nigeria Revenue Service has clarified the application of Value Added Tax (VAT) on banking services, stating that it is not a new development. In a recent statement, the agency addressed reports suggesting that Nigerian banks had begun introducing a 7.5 percent VAT on services such as transfers and Unstructured Supplementary Service Data (USSD) transactions.
According to the Nigeria Revenue Service, VAT has long been applicable to fees, commissions, and charges associated with banking services provided by financial institutions in the country. The agency stressed that claims of a newly introduced VAT on banking services are misleading and incorrect. This clarification comes amid reports that banks, including Moniepoint, had started charging customers a 7.5 percent VAT on certain transactions from January 19, 2026.
The Nigeria Revenue Service explained that VAT has always been applied to banking service charges under Nigeria’s established tax framework. The agency noted that the Nigeria Tax Act did not introduce any new VAT obligations on bank customers. This means that the existing tax framework already accounted for VAT on banking services, and no new taxes have been introduced.
To provide context, Value Added Tax is a consumption tax that is levied on the value added to goods and services at each stage of production and distribution. In Nigeria, VAT is administered by the Federal Inland Revenue Service, which is now referred to as the Nigeria Revenue Service. The tax is typically charged at a rate of 7.5 percent on eligible goods and services.
The Nigeria Revenue Service’s clarification is significant, as it provides clarity on the application of VAT on banking services in the country. The agency’s statement aims to correct misinformation and reassure bank customers that there has been no change to the existing tax framework. As the Nigerian government continues to explore ways to increase revenue, it is essential to ensure that tax policies are clear and well-communicated to avoid confusion among taxpayers. With this clarification, bank customers can expect business as usual, with no new VAT obligations on their banking services.
