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 was increased from 5% to 7.5% effective on the 1st of February 2020.

Examples on how to calculate the VAT increment

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 a a mobile phone which falls under the Phones and Tablet category with #600 Shipping cost, how much will the new shipping cost be, put into consideration the new 7.5% VAT charges?

(7.5 X 600) / 100 = 45

                           = 600 + 45

                           = 645

The new shipping cost will be #645

 

Commission Calculation

A vendor is selling a mobile phone at #5000 which falls under the Phones and Tablet category with 6% Commission, how much commission will be deducted?

Commission = 6% (0.06)

        0.06 x 5000   = 300

The commission deducted will be #300

Commission Fee

Please note that the commission’s fee is inclusive of VAT (7.5%).