By: ThinkBusiness Africa
The Nigeria Revenue Service (NRS) said in a statement on Thursday, that the newly Nigerian Tax Act didn’t introduce Value Added taxes (VAT), citing VAT deductions as longstanding practice.
The statement was made amid growing public concern regarding a supposed recent legislation imposed fresh VAT obligations on customers’ bank fees, commissions, or electronic money transfers.
The NRS—which recently succeeded the Federal Inland Revenue Service (FIRS) following the 2025 tax reforms—noted that “misleading narratives” have been circulating in the media. These reports suggested that the newly enacted Nigeria Tax Act was responsible for a hike in transaction costs.
“This claim is categorically incorrect,” the Service stated. “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.”
VAT on financial services is not a new development but a continuation of a policy that has been in place for years. In Nigeria 7.5% is being paid as VAT.
The clarification comes at a sensitive time as Nigeria transitions into a new fiscal era. The Nigeria Tax Act of 2025 was designed to simplify the tax code and consolidate various laws.
While the reform has introduced significant changes—such as zero-rating VAT for essential goods like food and healthcare—it has also sparked technical questions regarding electronic transfer levies and bank deductions.
Earlier this week, reports of “double stamp duty” charges led to a joint investigation by the NRS and the Central Bank of Nigeria (CBN). Today’s statement appears aimed at ensuring that standard VAT deductions are not confused with any new or erroneous levies.
