E-Financial
Buhari Inks 7.5% VAT into Law
With Monday’s signing into law of the Finance Bill, President Muhammadu Buhari has triggered the operationalisation of the 7.5% Value Added Tax (VAT) as proposed.
The Value Added Tax is proposed to increase from 5% to 7.5%.
The 2020 Budget projections are based on this new VAT increase with States and Local Government Authorities (LGAs) expected to benefit more from the VAT increase.
The objectives of the Bill, as outlined by President Buhari, are to strategically: “promote fiscal equity by mitigating instances of regressive taxation; reform domestic tax laws to align with global best practices; introduce tax incentives for investments in infrastructure and capital markets; support small businesses in line with the ongoing Ease of Doing Business Reforms; and raise revenues for the Government by various fiscal measures, including a proposed increase in the rate of Value Added Tax (VAT) from 5% to 7.5%.”
The key highlights of the new tax law are that banks will request for Tax Identification Number (TIN) before individuals are allowed to open bank accounts while existing account holders must provide their TIN to be able to operate their accounts.
By this Act, Non-residents who provide imported technical and management services in Nigeria will be taxable at a final Witholding Tax rate of 10%; Dividends distributed from petroleum profits will attract 10% withholding tax.
Those that will be affected by this law will be those with investments in oil and gas.
A minimum tax provision of 0.5% of turnover will apply to companies without profit and are unable to pay Company Income Tax (CIT) and exemption will only apply to small companies that record less than ₦25 million turnover.
Non-resident companies will now pay minimum tax. Specifically, small businesses with turnover less than ₦25 million will be totally exempted from Companies Income Tax (CIT) and entities with less than ₦25 million in turnover are exempted from VAT registration.
Going forward, CIT rate of 20% now applies to medium-sized companies with turnover between ₦25 million and ₦100 Million. This is to boost Small and Medium Enterprises (SMEs). The law will now allow the use of Emails as a communication medium with tax institutions particularly the FIRS and State Revenue Agencies.
Early payment of Company Income Tax has been incentivised with the deduction of 2% of tax payable by medium-sized companies and 1% for large companies.
Henceforth, Stamp duty on bank transfers will apply to amounts from ₦10,000 and above.
Transfers between the same owner’s accounts in the same bank will be exempted. Electronic bank transfers included.
Taiwo Oyedele of PriceWaterhouseCoopers in an interview with TVC noted that “by increasing VAT from 5% to 7.5% at 2019 or 2018 level of performance, you are going to raise around ₦550 billion.
‘’Now when you raise ₦550 billion only 15% goes to the Federal Government, 50% goes to the states and 35% to the local government.
‘’All together that is not going to move the needle in terms of bridging the budget deficit but may be its a baby step in the right direction.”
A positive take on the new VAT initiative Oyedele added is that the “burden does not fall on the vulnerable and poorest people in the society as well as small businesses.
Which is what I think that government has tried to do with the finance bill by expanding the list of exempt items and then creating a threshold for small businesses not to have to worry about charging VAT on their goods and services.”
He described the bill as “a reform measure which I think is good if you are able to enable businesses grow, you can create more employment and then that way you can generate more revenue from VAT because more people can consume because they have more buying power and if businesses become more profitable they can pay more taxes so altogether I think it’s a positive development.”
Nigerian banks have resumed international transactions on naira-denominated debit cards, marking a significant shift in banking operations for customers who rely on foreign payments.
This is coming nearly three years of suspension.
United Bank for Africa (UBA) and Wema Bank, in separate communications to their customers, announced the restoration of international payment services on their naira cards.
In a notice to its customers, UBA said the reactivation of international transactions on its premium naira cards aligns with its commitment to delivering improved and seamless banking experiences.
“We are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants, are now enabled for international transactions,” the bank stated.
“This means you can now use your Premium Naira Card for global payments — including online shopping, POS, and ATM transactions — with ease and flexibility. If you haven’t used your card recently, now is a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder.”
Similarly, Wema Bank announced that its customers can now make dollar payments on international platforms using their naira Mastercards.
“Your Wema Naira Mastercard just went global!” the bank said. “Now you can pay in dollars on all your favourite international platforms — Amazon, eBay, AliExpress, Netflix, Spotify, YouTube.”
The development marks a major relief for Nigerian customers who have had to rely on dollar cards or alternative payment methods since most banks suspended international usage of naira cards in 2021 due to foreign exchange scarcity.
Flutterwave, Africa’s leading payments technology company, today announced the relaunch of its flagship remittance solution, Send App, across U.S. states following its newly acquired Money Transmitter Licences (MTLs).
This comes after Flutterwave secured 20 additional MTLs in the U.S., adding to the 14 licenses the brand has held since 2023.
Altogether, this achievement raises Flutterwave’s total number of direct licenses to 34, allowing the company to operate across many U.S. states and territories without partners or intermediaries.
Users in the U.S. can now send money to Nigeria, Ghana and Egypt, unlocking new remittance corridors that were previously unavailable.
Alongside this expansion, the onboarding process has been streamlined with a quick ID check, making it faster and easier for new users to get started.
Additional improvements include optimised payment support for US-issued Visa and Discover cards, enhanced security measures to safeguard transactions and maintain compliance, and improved in-app flows for a simpler, more efficient sending experience.
This return also highlights Flutterwave’s commitment to delivering a seamless, secure, and regulatory-compliant user experience for all Send App customers in the U.S. Users can now send money from DC, Georgia, Maryland, North Carolina, Michigan, South Carolina, Tennessee.
Other U.S. states and territories where Send App by Flutterwave supports outward remittances include Alaska, Arizona, Arkansas, Delaware, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Minnesota, Mississippi, and Missouri, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Dakota, Utah, Washington, West Virginia, Wisconsin, and Wyoming.
Commenting on the relaunch, Olugbenga “GB” Agboola, Flutterwave Founder and CEO, said, “By expanding our reach and enhancing our services, we are empowering millions of Africans in the U.S. to maintain strong financial ties with their home countries, support their families, and contribute to economic development across the continent. Additionally, we are staying true to our core mission of bridging Africa with the global economy and vice versa.”
Earlier this year, Flutterwave integrated Swap into Send App for seamless FX transactions and strengthened its services in Ghana by securing approval for inward remittance from the Bank of Ghana.
Federal High Court in Abuja on Friday affirmed the authority of the Nigeria Inter-Bank Settlement System (NIBSS), to manage the Bank Verification Number (BVN), database across the country, in line with the Central Bank of Nigeria (CBN), Act and other relevant banking laws.
This is according to a judgment delivered by Justice James Omotosho on Friday.
Wolemi Esan, senior advocate of Nigeria, NIBSS’s counsel, and Kofo Abdulsalam-Alada, lead counsel for the CBN, among others, had sought a restraining order to prevent any institution in Nigeria from challenging the agency’s statutory authority to maintain and manage the BVN database.
This comes as NIBSS had alleged that Digital Rights Lawyers Initiative filed multiple suits, either directly or through proxies, challenging its authority to manage the BVN database and claiming that such management violates constitutional privacy rights.
However, Justice Omotosho, delivering his judgment, said the BVN does not infringe on the constitutional right to privacy.
“The initiative does not infringe on the constitutional right to privacy but rather serves as a necessary tool for safeguarding public interest and enhancing financial security.
“NIBSS has the power to manage the BVN,” the judge said, citing relevant CBN laws.
“The court grants the reliefs of NIBSS as prayed,” he stated.
Nigerian Banks End Years of Embargo, Resume Intl Transactions on Naira Cards
Flutterwave Secures 20 more US Money Transmitter Licences
Court Affirms NIBSS Authority to Manage BVN
NIMC Says NIN Services Back Online
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