In line with the Federal Government’s directive on the Finance Act 2019, the Value Added Tax (VAT) applicable on goods and services offered by Jumia is 7.5% which took effect on 1st of February 2020.

Examples on how to calculate the VAT charge

Example 1

Let us assume that a vendor wants to purchase a basic sponsored product package (#15000). The VAT calculation is 7.5%, what amount will the vendor pay?

(7.5 X 15000) / 100  = 1125

                              = 15000 + 1125

                               = 16125

The new amount that the vendor will pay for the above basic sponsored product package is now 16125

Example 2

A vendor is selling an Airconditioner which falls under the Home catergory with a weight of over 50kg which Jumia tags as “Large Item” the shipping cost contribution for Jumia Express will be N1,320 while for Dropshipping it will be N2,920, how much will the new shipping cost be, put into consideration the new 7.5% VAT charges?

(7.5 X 1320) / 100 = 99

                           = 1320 + 28.5

                           = 1,419

The new shipping cost will be #1,419

You can do the same calculation for the dropshipping model to know the final value.