Bank customers in Nigeria have expressed dissatisfaction with the newly introduced 7.5 percent Value Added Tax (VAT) on selected electronic banking services. The tax, which applies to service fees for transactions such as mobile banking transfers, card issuance, and loan processing, has been criticized for adding to the financial burden on citizens. According to customers who spoke to the News Agency of Nigeria, the VAT is being seen as an additional expense that could deter people from using banking services.
The customers appealed to the Central Bank of Nigeria (CBN) to ensure that banks do not use the VAT as an excuse to exploit their customers. They noted that while the VAT only applies to service fees and not the principal amount transferred, the cumulative effect of various bank charges is still a significant concern. For instance, one customer, Evelyn Oputa, reported being charged N1,680 for SMS services in December, in addition to other fees such as stamp duty and electronic money transfer levies.
Another customer, Akolam Nzeh, expressed frustration with the government’s focus on tax collection, suggesting that the revenue generated should be used to improve the country’s infrastructure. He noted that the increase in bank charges has not been matched by a corresponding increase in salaries, making it difficult for citizens to cope with the additional expenses. Segun Agboola, a bank customer, urged the CBN to monitor the activities of banks to prevent excessive charges.
The introduction of the VAT on electronic banking services is part of the Nigerian government’s efforts to increase revenue. The Nigerian Revenue Service (NRS) had mandated all financial institutions to begin collecting and remitting VAT from January 19. The tax applies to various electronic banking charges, including mobile banking transfer fees, card issuance, and loan processing fees. While a banker who preferred anonymity assured that banks would not exploit customers, the introduction of the VAT has sparked concerns among customers who feel that they are being over-taxed.
The controversy surrounding the VAT on electronic banking services highlights the need for a balance between revenue generation and the protection of consumers’ interests. As the Nigerian government continues to explore ways to increase revenue, it is essential to ensure that the burden of taxation is distributed fairly and does not disproportionately affect vulnerable citizens. The CBN’s role in regulating the banking sector and protecting consumers will be crucial in addressing the concerns raised by bank customers.
