Understanding VAT on Transaction Fees
Understanding VAT on Transaction Fees
In compliance with recent government and regulatory directives (CBN), a 7.5% Value Added Tax (VAT) is now applicable to all transaction service fees.
What does this mean for you?
The VAT is only charged on every fee excluding interest on loans.
Fee Breakdown Example:
For a standard transfer with a ₦10.00 service fee, the calculation is as follows:
| Item | Amount |
| Standard Transaction Fee | ₦10.00 |
| 7.5% VAT (on the fee) | ₦0.75 |
| Total Charge | ₦10.75 |
Why is this change happening?
This adjustment is a mandatory requirement for all financial institutions to align with national tax regulations. We appreciate your understanding as we ensure our services remain fully compliant with these regulatory standards.
How VAT is Debited
When you perform a transaction, you will notice two separate entries in your activity log:
Principal & Fee: The transaction amount and the standard service charge are debited together as one sum.
VAT Entry: The 7.5% VAT is debited as a separate line item immediately following the initial transaction.
Note: The VAT amount may vary depending on the specific transaction fee of your selected service.
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