The Nigeria Revenue Service (NRS) has clarified that no new Value Added Tax (VAT) has been introduced under Nigeria’s new tax law. According to the NRS, VAT remains 7.5%, and the law only restates existing rules to improve clarity and compliance, especially following public confusion about bank charges.
The NRS explained that VAT applies only to service charges and fees, not to the main amount of money involved in transactions. For example, VAT is charged on bank service fees such as transfer charges, SMS alerts, and card maintenance fees, but not on the money being transferred, withdrawn, or saved. Interest earned on bank deposits and loan repayments are also not subject to VAT.
The agency further confirmed that essential goods and services remain VAT-free, including basic food items, medical and pharmaceutical products, and educational services. These exemptions are meant to protect Nigerians from increased living costs.
Overall, the new tax law focuses on better tax administration, with the Nigeria Revenue Service replacing FIRS and strengthening enforcement. The NRS assured Nigerians that there is no new VAT burden, urging the public to ignore misleading reports about fresh taxes on everyday banking activities.
