Nigeria Revenue Service Clarifies VAT

The Nigeria — Nigeria Revenue Service (NRS) has issued a statement to correct widespread misinformation regarding the imposition of Value-Added Tax (VAT) on banking services. The NRS clarified that 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, and was not newly introduced by the Nigeria Tax Act. The agency emphasized that VAT is charged only on the service fee (e.g., transfer fees, USSD charges) and not on the actual amount of money transferred or withdrawn. Furthermore, interest earned on savings accounts, fixed deposits, basic food items, essential goods, medical services, pharmaceutical products, and educational services remain exempt from VAT. The NRS stated that the recent focus is on compliance and enforcement of existing tax obligations rather than the introduction of new VAT burdens on ordinary Nigerians. The statement, signed by Dare Adekanmbi, Special Adviser on Media to the NRS chairman Zacch Adedeji, urged the public to rely on official communications for accurate tax information.