Banks Begin New Deduction on Electronic Transactions, Customers Not Happy
- Bank customers have raised concerns as commercial banks begin deducting 7.5% VAT on selected electronic banking service
- Customers say multiple deductions, such as SMS alerts, transfer fees, stamp duty and maintenance charges are adding pressure on incomes
- A customer service representative explained that the deductions follow regulatory directives, clarifying that VAT applies only to service fees
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Bank customers across Nigeria have begun reacting to new deductions on their accounts as banks implement 5% Value Added Tax charges on selected banking services.
They expressed concern over the growing cost of electronic transactions.
Source: Getty Images
News Agency of Nigeria (NAN) reported that the latest deductions, including the 7.5% Value Added Tax (VAT) on eligible electronic banking services, were discouraging at a time when household incomes remain under pressure.
The bank customers have therefore urged the Central Bank of Nigeria (CBN) to closely monitor banks to ensure the new charges are applied strictly in line with regulatory guidelines.
Customers speak on new bank charges
Evelyn Oputa, a bank customer, said she was alarmed by the series of debit alerts she received on her account in recent weeks, noting that bank charges and taxes were becoming excessive for ordinary Nigerians.
Oputa said:
“In December alone, I was charged about N1,680 on SMS alerts, and this month, stamp duty charges also increased. I made a purchase and saw debits for stamp duty, NIP transfer, electronic money transfer levy, card maintenance fee and other charges."
“We are already facing difficult times, and these deductions keep piling up. She appealed to the government to review the policy."
Another customer, Akolam Nzeh, accused the government of focusing more on tax collection than on citizens’ welfare. He called on authorities to ensure that revenues generated from taxes are channelled into visible infrastructure and social services.
Nzeh said:
“Everywhere you turn now, it is tax. Salaries have not increased, yet bank charges keep rising."
Also, Segun Agboola appealed to the CBN to monitor the activities of banks to prevent overcharging and ensure transparency in the application of fees, Tribune reports.
Source: UGC
Banker explains new charges
A banker, Olamide Oladehinde, in a chat with Legit.ng explained that the deductions were based on statutory requirements and regulatory directives.
He noted that the VAT applies to service fees on mobile banking transfers, USSD transactions, card issuance and activation, Point of Sale (PoS) transactions, and loan processing and documentation fees.
He said:
"VAT is applied only to the service fee charged by banks and not to the actual amount transferred. For example, a N10,000 transfer with a N10 service fee attracts a VAT of 75 kobo, bringing the total charge to N10.75."
Lawmakers seek probe of bank charges
Earlier, Legit.ng reported that the House of Representatives has initiated plans to investigate charges of commercial banks on customers' accounts and plans to summon the CBN and major commercial banks to appear before the committee on banking regulations.
The move followed the adoption of a motion of urgent public importance sponsored by Tolani Shagaya, a lawmaker from Kwara State.
The motion, titled “Need to Curb Arbitrary Bank Charges and Protect Nigerian Customers,” stated that the deductions from customers' accounts by banks operating in Nigeria are arbitrary, excessive, and unexplained.
Source: Legit.ng
