Explanation of the 7.5% VAT that will be changed starting from January 19, 2026

[Karl_3000]

VAT of 7.5% will be charged on naira transfer

It has been said that we Nigerians should not think it is 7.5% of the total amount of money that we are transferring. If you send 10000 naira and 100 naira is charged, the VAT which is 7.5% of 100 is is 7.5 naira.

You can watch this video to know more about it: https://youtu.be/wGgZH_pT09Y?si=DVmKz-7mIIlQ0_Ts

They said we may not noticed that the commercial banks have been charging the VAT since years ago but probably because it is small and because most of us using cryptocurrencies that are using Microfinance Banks and Fintechs did not know.

[Emjay24]

It has been said that we Nigerians should not think it is 7.5% of the total amount of money that we are transferring. If you send 10000 naira and 100 naira is charged, the VAT which is 7.5% of 100 is is 7.5 naira.

Good one, citing your example, the new deduction is now 107.5 naira in place of previous #100 right?

They said we may not noticed that the commercial banks have been charging the VAT since years ago but probably because it is small and because most of us using cryptocurrencies that are using Microfinance Banks and Fintechs did not know.

Yes, you're right, Fintechs did not incorporate it earlier because they were not much recognized by the CBN then due to low volume, but seeing much money flow through their system in recent years, government had to direct them to apply same tax system which has been in place before now in their operations.

It is more like they have grown now and the government now wants its share from their operations.

[Karl_3000]

Good one, citing your example, the new deduction is now 107.5 naira in place of previous #100 right?

Yes if the bank wants to charge 100 naira as the transaction fee.

[Yablee0]

It has been said that we Nigerians should not think it is 7.5% of the total amount of money that we are transferring. If you send 10000 naira and 100 naira is charged, the VAT which is 7.5% of 100 is is 7.5 naira.

If that is how they want to go about the deduction of vat from our various daily transactions fees them I don't think their is a problem with it because from  your explanation I have gotten it right because initially I was thinking that the 7.5% will be charged from the whole funds you're transferring and that would have be a disaster. However , regardless am still trying to understand why our government is finding every possible means of  taking from the poor citizens knowing well that the current administration hasn't given anything out to the youth, meaning that the commons man in the society hasn't gain indirectly or directly from the administration yet they're still looking for a way further to frustrate the people.  Someone really need to beg Tinubu oh!

[FirmWars]

Was there any reason to lock the first thread where I wrote my comment and opened this one which is just the same subject matter as the first thread. What you stated here as a fresh topic could have just been what you would have added to the first topic since it's same subject matter. Unless it was a moderator that locked the thread, then am wrong.

[Pjcr7]

Yes, you're right, Fintechs did not incorporate it earlier because they were not much recognized by the CBN then due to low volume, but seeing much money flow through their system in recent years, government had to direct them to apply same tax system which has been in place before now in their operations.

It is more like they have grown now and the government now wants its share from their operations.

There has always been VAT deductions wether in the commercial banks or fintech banks, there has always been VAT deductions just that this government has taken on a new different level and even increased the VAT to this 7.5% that will take effect from on Monday. You can't say they were not much recognised, that I disagree with you on. Every Fintech was licensed by the CBN and without their approval there will never be that particular fintech in operation in Nigeria so why will you say they were not that recognised! Infact Fintech was brought in place to handle transactions of thousands of naira to few millions of individuals way faster than the commercial banks. They deal with numbers take for instance, when let's say 50 million people does transaction of 2k, 5k 10k, 100k, 1 million, 2 million, 10 million in a day, so you know how much that is? and some of these transactions are done on multiple occasions daily, the turn over per day will be more than some commercial banks in the country. So when you said they were not recognised by CBN due to low volume, I was shocked.