Nigerians on social media have expressed mixed reactions following a clarification by the Nigeria Revenue Service (NRS) on the application of 7.5 percent Value Added Tax (VAT) on banking service fees.
In a press release dated January 15, 2026, the NRS dismissed claims that the Nigeria Tax Act had newly introduced VAT on banking services, electronic transfers, or commissions, describing such reports as misleading.
According to the agency, VAT has always applied to banking service charges, including fees and commissions, under Nigeria’s long-established VAT regime, and no new tax obligation was imposed by the recent law.
“The Nigeria Tax Act did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard,” the NRS said.
Despite the clarification, the announcement sparked widespread debate on X (formerly Twitter), with many users questioning the timing, communication style, and broader implications of the enforcement.
One user, @HephzibaBehulah, described the clarification as “technically correct” but criticised the messaging, noting that recent bank notifications gave the impression of a new tax on transfers.
She explained that VAT applies only to bank service fees — not the amount being transferred — but argued that poor communication fueled public panic.
“People thought sending ₦20,000 would attract ₦1,500 in VAT. The NRS could have avoided this by using clear examples from the start,” she wrote.
Another user, @Mkay_vic97, questioned how VAT deductions would be calculated in practical terms, citing confusion among everyday Nigerians.
“Can you explain how the deductions will go? If someone sends ₦20,000, are they charged 7.5% on that?” he asked, reflecting concerns shared by many users.
Some reactions went beyond clarification concerns to broader frustrations about governance and accountability.
@conceptraw expressed anger over rising costs, suggesting that frequent tax discussions were pushing citizens away from formal banking.
Others, including @Aliyyyou and @unfilteredangle, questioned how tax revenues are utilised, arguing that increased taxation has not translated into visible public benefits.
“All you guys talk about is tax here or tax there with nothing to show for it,” one user said.
Under the current framework, the 7.5% VAT is charged only on banking service fees, such as, transfer charges, POS transaction fees, card issuance fees, USSD charges,
not on the principal amount sent or received.
For example, if a bank charges a ₦50 transfer fee, VAT would amount to ₦3.75, not 7.5% of the transferred sum.
The NRS urged Nigerians to rely on official communications for accurate tax information and to disregard misinformation circulating online.