Access, GTB, UBA, Zenith, others remove over N100bn from customer's account for government

Nigerian financial institutions, including banks and other financial institutions, remitted N156.94 billion Value Added Tax(VAT) to the federal government's account.

The amount represents a significant increase of 136.63% when compared to the N78.77 billion VAT remitted in the same period of 2022.

The figure was captured in the latest sectorial distribution of Value Added tax report published by the National Bureau of Statistics supplied by the Federal Inland Revenue Service(FIRS).

What is the Bank's VAT?

The Value Added Tax Act Cap V1 LFN 2004 (as amended) imposes a tax known as Value Added Tax (VAT) on taxable goods and services at a rate of 7.5%.

Part 2 of the First Schedule to the Act only exempts services rendered by Community banks, people banks and Mortgage institutions from VAT.

Accordingly, all banks and financial institutions, except those exempted, are required to charge VAT on services rendered to their customers and account for the same to the Federal Inland Revenue Service.

How banks have remitted to the government so far in 2023

Legit.ng analysis showed that in the first quarter of 2023(January to March), a total of N35.40 billion was removed from customers' accounts and remitted to the government.

This is an increase from N29.27 billion in Q1, 2022. In the second quarter of 2023, it increased to N57.26 billion from N22.342 billion in the corresponding of 2022.

The increase continued in the third quarter to N64.27 billion, an improvement from N27.16 billion in Q3, 2022.