The Nigeria Revenue Service (NRS) has denied reports that Value-Added Tax (VAT) is being imposed on banking services, including electronic money transfers, fees, and commissions. In a statement, Mr. Dare Adekanmbi, Special Adviser on Media to the NRS Executive Chairman, Dr. Zacch Adedeji, explained that VAT has always applied to banking services and was not newly introduced under the Nigeria Tax Act.
*VAT Applies to Service Charges, Not Transactions*
Adekanmbi clarified that VAT applies to commissions, fees, and charges for services rendered by banks and other financial institutions, such as transfer fees, USSD charges, and account maintenance fees. He emphasized that VAT is not charged on the amount of money transferred or withdrawn, but rather on the service charge or commission imposed by the bank.
*Exemptions*
The NRS also highlighted exemptions under the Nigeria Tax Act, including:
– Basic food items and essential goods
– Essential medical services and pharmaceutical products
– Tuition and core educational services provided by recognized educational institutions
– Interest earned on savings accounts, fixed deposits, and similar deposit accounts
*Compliance and Enforcement*
Adekanmbi noted that what has changed is compliance and enforcement, not the law. Financial institutions are being reminded of their existing obligation to remit VAT already charged and collected from customers.
*Public Advisory*
The NRS urged the public to disregard misinformation and rely on official communications for accurate and up-to-date tax information. The service also provided a list of Frequently Asked Questions (FAQs) to provide further clarity on VAT-related issues [1].
