Banks Issue Update on Card Maintenance Fee Deduction
- Nigerian banks have started deducting VAT on card maintenance fees and selected electronic banking charges
- The move follows a directive from the NRS requiring banks to collect and remit VAT on eligible digital banking services
- Wema Bank and other lenders have updated policies, while deposits and transfers remain exempt
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.
Nigerian banks have begun deducting a 7.5 per cent Value Added Tax (VAT) on card maintenance fees and other selected electronic banking charges, which kicked off officially on January 19, 2026.
Under the new arrangement, a N50 card maintenance fee now attracts an additional N3.75 as VAT.
Source: Getty Images
Banks begin tax deduction
Tribune reports that a debit alert seen by a Wema Bank customer showed both N50 and N3.75 were removed separately for the same transaction, even though the account balance initially appeared unchanged after the first debit.
The move has sparked questions among customers, many of whom are experiencing the practical impact of VAT on routine banking services for the first time.
The development follows a directive from the Nigerian Revenue Service (NRS), mandating financial institutions to collect and remit VAT on eligible electronic banking services as part of efforts to standardise tax administration in the digital economy.
Earlier, Wema Bank had informed customers via email about changes to cash-related policies and electronic banking operations in line with regulatory guidelines.
The updates, which took effect from January 1, 2026, aim to improve cash management, enhance security, and encourage wider adoption of digital payment channels.
Source: Getty Images
One major change is the removal of limits on cash deposits, allowing customers to deposit unlimited amounts without incurring charges on excess deposits.
NRS clarifies new VAT
The NRS clarified that VAT applies only to fees collected by banks, not on the funds transferred by customers.
The agency emphasised that VAT has always been applicable to banking services under Nigeria’s tax framework and that the new regulations do not impose additional tax burdens on customers.
The NRS stated:
“The Nigeria Revenue Service (NRS) wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect.
"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.
" 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 Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information."
The NRS reassured the public that deposits and transfers remain exempt from VAT, while only bank service fees are taxable.
Expert explains 7.5% VAT on transfers
Earlier, Legit.ng reported that financial expert Gilbert Ayoola has explained why Nigerian bank customers will begin paying a 7.5% Value Added Tax (VAT) on mobile banking transfers, USSD transactions, and other electronic banking services from January 19, 2026.
The new charges are alongside the existing N50 stamp duty on electronic transfers of N10,000 and above.
He noted that the move also ensures stricter compliance with federal tax regulations and aligns with the government’s drive to increase revenue.
Source: Legit.ng
