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
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
The new amount that the vendor will pay for the above basic sponsored product package is now 16125
A vendor is selling a a mobile phone which falls under the Phones and Tablet category with #240 Shipping cost, how much will the new shipping cost be, put into consideration the new 7.5% VAT charges?
(7.5 X 500) / 100 = 18
= 240 + 18
The new shipping cost will be #258