Business

VAT on Banking Services: Setting the record straight

Published

4 months ago

January 21, 2026

By Arabinrin Aderonke

In recent days, Nigerians have been inundated with reports suggesting that the Federal Government has introduced Value Added Tax (VAT) on banking services such as electronic transfers, fees and commissions. Understandably, this has triggered anxiety among citizens already grappling with economic pressures.
However, the truth is far less dramatic than the headlines suggest.

Contrary to widespread claims, VAT on banking services is not new. It was not introduced by the Nigeria Tax Act, 2025, and it does not represent an additional financial burden on bank customers.
For decades, Nigeria’s VAT framework has applied to fees, commissions and charges for services rendered by banks and other financial institutions.

What has changed is not the law, but enforcement.
The Nigeria Revenue Service (NRS) has been compelled to clarify this point following a wave of misinformation that blurred the line between service charges and actual funds transferred. VAT is not, and has never been, charged on the amount of money a customer transfers or withdraws.

Rather, it applies strictly to the service fee imposed by the bank.

This distinction is critical. When a customer transfers ₦10,000 or ₦1 million, VAT is not deducted from the transferred sum. It is calculated only on the small service charge associated with the transaction.

Interest earned on savings accounts and fixed deposits also remains exempt, as it does not constitute a supply of goods or services under the law.

Equally important is what VAT does not cover. Basic food items, essential goods, medical and pharmaceutical products, as well as educational services, remain firmly exempt under the Nigeria Tax Act, 2025. These protections were deliberately preserved to shield ordinary Nigerians from unnecessary hardship.

So why the sudden public concern?The answer lies in improved compliance and enforcement. Financial institutions are being reminded of their obligation to remit VAT already charged and collected. This renewed focus has created the false impression of a new tax, when in reality, it is the implementation of an existing one.

Tax reforms often attract controversy, especially in times of economic strain. Yet clarity must prevail over confusion. Spreading inaccurate information undermines public trust and distracts from the real conversation Nigeria must have about transparency, accountability and effective tax administration.

The Nigeria Revenue Service has made it clear that the Nigeria Tax Act, 2025, does not introduce any new VAT burden on ordinary citizens, particularly in sensitive areas such as savings, food, healthcare and education.

As Nigerians, we deserve honest explanations not alarmist headlines. In a democracy, scrutiny is healthy, but it must be anchored on facts.

The task before us is not to fear taxation, but to demand that taxes already in place are administered fairly, communicated clearly, and used responsibly for national development. That is the conversation worth having.

Arabinrin Aderonke Atoyebi is the Technical Assistant on Broadcast Media to the Executive Chairman of the Nigeria Revenue Service.

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Agriculture

PULA, Leadway Assurance Disburse ₦396 Million to Climate-Affected Farmers, Strengthen Food Security Efforts

Published

3 weeks ago

April 24, 2026

The Gleamer

In a major intervention to shield smallholder farmers from climate shocks, agri-insurtech firm PULA has spearheaded the disbursement of ₦396,697,672 in insurance claims to over 40,000 farmers impacted during the 2025 wet season.

The payout, executed in partnership with Leadway Assurance and supported by the Presidential Food Systems Coordinating Unit (PFSCU), covered farmers across Taraba, Borno, Kaduna, and Plateau States who suffered climate-related losses.

The initiative was made possible in part by Bayer Foundation, whose $450,000 premium subsidy support in 2025 wet season helped lower the cost of insurance for thousands of vulnerable smallholders in 8 states, with 4 states receiving payouts. The Foundation is set to scale up its contribution to match the growing aspirations of state governments.

Speaking at the cheque presentation ceremony in Abuja during the 2025 Wet Season Insurance Claims Payout under the National Agribusiness Planning Mechanism (NAPM), PULA’s Nigeria Country Director, Dr. Michael Enahoro, said the initiative goes beyond compensation, insisting that it’s about securing Nigeria’s food systems.

“Our focus is not just on payouts but on increasing food production. We must continue to support farmers who work tirelessly under harsh conditions to feed the nation,” Dr. Enahoro said. He called for stronger policies that directly impact farmers and reaffirmed PULA’s commitment to expanding agricultural insurance as a tool for resilience.

PULA’s data-driven approach to climate risk was key to identifying affected farmers and triggering payments. The company worked with Leadway Assurance to underwrite the risk, while PFSCU aligned the program with the national food security agenda. State governments also supported grassroots enrollment.

Gboyega Lesi, MD/CEO of Leadway Assurance, described the payout as “a reinforcement of a safety net that protects the hard work of thousands of farmers,” adding that “through climate insurance, we ensure that a bad season does not translate into total loss of livelihood.” He commended PULA’s technology and field structure for making rapid, transparent payouts possible.

Ayoola Fatona, Global Head of Agric Solutions at Leadway Assurance, noted that the 2025 wet season brought significant climate variability and yield fluctuations. “The true value of insurance lies in claims payment, especially in challenging periods. Our data-driven partnership with PULA helped mitigate losses,” he said.

Looking ahead, PULA and Leadway Assurance plan to scale coverage to 73,000 farmers in the 2026 farming season, deepening penetration of climate insurance across Nigeria’s food-producing belts.

Commissioners from the beneficiary states commended PULA and Leadway Assurance for de-risking agriculture, restoring farmers’ confidence, and building a more resilient agricultural sector

State-by-state breakdown of claims facilitated by PULA: