Jtax Consult

Nigeria now has a new set of tax legislation:

Nigeria Tax Act 2025 (NTA 2025)
Nigeria Tax Administration Act 2025
Nigeria Revenue Service (Establishment) Act, 2025
Joint Revenue Board of Nigeria (Establishment) Act, 2025

These new Acts introduce several important changes, and in this article, we highlight two of the most impactful updates affecting the banking and finance sector.

a) Withholding Tax on Interbank Placements

Under the repealed Company Income Tax Act (CITA), specifically Section 78(1) interbank deposits enjoyed exemption from Withholding Tax (WHT) on interest.

However, the Nigeria Tax Act 2025 does not carry forward this exemption

What this means?

Banks are now required to treat interbank placements the same way they treat customer deposits. Interest earned on interbank deposits is now subject to Withholding Tax (WHT).

This change has taken many banks by surprise, especially considering the cash‑flow impact on treasury operations.

Unless an amendment is made, this provision remains in force
The silver lining is that WHT deducted can be claimed as credit against corporate income tax.

What Banks Need To Do

a. Track and account for WHT on all interbank placements ensuring proper follow‑up for tax credit utilization.
b. Engage regulators and industry groups to advocate for a reinstatement of the exemption where possible.


b. VAT on Services Provided by Microfinance and Mortgage Banks

Under the repealed VAT Act, the services of Microfinance Banks (MFBs) and Mortgage Banks were exempt from VAT.

The Nigeria Tax Act 2025 removes that exemption. As a result, the services of these institutions are now subject to VAT, just like those of commercial banks.

Important Clarifications;
The 7.5% VAT is NOT charged on the transaction value, but on:

– fees
– charges
– commissions

For example:
If GenX Bank charges a transfer fee of ₦1,000, VAT at 7.5% will be ₦75 making a total charge of ₦1,075.

Key Notes
– VAT collected belongs to the government, not the bank.
– Banks must remit VAT monthly.
– For customers of commercial banks, this is business as usual.
– For customers of microfinance, community, and mortgage banks, this is a new requirement under the NTA 2025.

Final thought.

Members of the public are encouraged to ignore unverified or misleading social media posts. The new laws are written in clear language and are easy to read and understand

Please note this article should no in anyway be construed to be financial advisory, individual or organization advised to do due diligence in their tax activities and consult professional