Bank customers have expressed strong dissatisfaction over the implementation of the 7.5 per cent Value Added Tax (VAT) on selected electronic banking services, warning that the multiplicity of taxes is becoming an unbearable burden on citizens.
Many of those who spoke to newsmen in Abuja on Sunday appealed to the Central Bank of Nigeria (CBN) to intervene and ensure that financial institutions do not use the tax directive as a cover to exploit depositors.
Although the VAT is designed to apply only to service fees and not the principal amount transferred, customers argue that the cumulative effect of various deductions is discouraging and could deter the unbanked population from entering the formal financial sector.
Mrs. Evelyn Oputa, a concerned customer, decried the situation, noting that ordinary Nigerians are already facing severe economic challenges.
She detailed her recent experiences with excessive deductions, citing a debit of N1,680 for SMS charges in December alone, alongside increases in stamp duty.
“I bought something and also received a debit of N250 as stamp duty, NIP transfer, electronic money transfer levy, card maintenance fee, and various other charges. I heard that the stamp duties collected by banks are being remitted to the government. Why do they still want banks to remit VAT? We, the customers, will be the ones at the receiving end,” Oputa lamented.
Echoing these sentiments, Mr. Akolam Nzeh argued that the government appears focused on tax collection at the expense of citizen welfare.
He highlighted the disconnect between stagnant income levels and rising costs.
“It is like this year will be a year of taxes in this country. Everywhere you turn, you will hear tax. The worst part is that salaries did not increase, yet bank charges have kept increasing,” he said.
Another customer, Mr. Segun Agboola, specifically called on the CBN to monitor the banks closely to check for excesses and ensure charges remain within regulatory limits.
Reacting to the concerns, a banker who requested anonymity assured customers that banks would not exploit them under the guise of VAT remittances, emphasizing that customers remain the basis of their existence.
The outcry follows a mandate directing all financial institutions including commercial banks, microfinance banks, and electronic money transfer operators to commence the collection and remittance of VAT starting January 19.
The tax applies to various electronic banking charges, such as mobile banking transfer fees, Unstructured Supplementary Service Data (USSD) transaction fees, card issuance and activation fees, Point of Sale (PoS) transaction fees, and loan processing fees.
Clarifications have been made that the VAT is calculated strictly on the service fee of a transaction, not on the principal amount being moved.
