E-Financial
FIRS Sets 2020 for Commencement of Online Transaction VAT
The Federal Inland Revenue Service (FIRS) says it will begin to impose Value Added Tax (VAT) on online transactions, both domestic and international, from January 2020.
The chairman of FIRS, Tunde Fowler, disclosed this at the African Tax Administration Forum (ATAF) Technical Workshop on VAT on Monday in Abuja.
Mr Fowler said many countries had identified Nigeria as a big market and many of them were doing online businesses, adding that there was the need to tap the potentials to generate more revenue for the country.
He, however, said that the date of commencement of the VAT on online transactions would be subject to the government’s approval.
“We have thrown it out to Nigerians. Effective from January 2020, we will ask banks to charge VAT on online transactions, both domestic and international.
“VAT remains the cash cow in most African countries, with an average VAT-to-total tax revenue rate of 31 percent. This is higher than the Organisation for Economic Cooperation and Development’s average of 20 percent.
“This statistics, therefore, is a validation of the need for us to streamline the administration of this tax with the full knowledge of its potential contributions to national budgets.
“It is, however, also bearing in mind the rights of our taxpayers,” he said.
He said in Nigeria, VAT is critical to the development of projects at all levels of government.
“VAT revenue is shared 15 percent to the Federal Government, 50 percent to state governments and 35 percent to local governments.
“FIRS wrote to all commercial banks in May 2018, requesting for a list of companies, partnerships and enterprises with a banking turnover of N1 billion and above.
“This activity is aimed at ascertaining those companies that are compliant with the tax laws and those that are not,” he said.
Mr Fowler, who is also the chairman of ATAF, said the African tax outlook gave some starting points on the questions to ask regarding some aspects of VAT.
“Why does VAT contribute 51 percent to total tax revenue in Senegal but only 17 percent in Nigeria? Why is the ratio on VAT refunds at 49 percent in Zambia but only one percent in The Gambia?” he queried.
Mr Fowler charged participants at the workshop to find answers to the questions and address the gaps in some countries to improve VAT collection.
Logan Wort, Executive Secretary of ATAF, said the establishment of the ATAF VAT Technical Committee in 2017 had given rise to various debates aimed at giving better policy options for countries.
Wort explained that this would enable member-states to share ideas and techniques on how best to administer, design and audit VAT.
He said the establishment of the committee was a way of practically addressing some issues that were becoming common phenomena across the continent.
Ecobank Nigeria has announced plans to phase out its Naira-denominated Mastercard debit cards, with a transition period scheduled to run from July 29 to September 29, 2025.
The bank disclosed the development in a message sent to customers on Wednesday, urging account holders to switch to a Verve debit card available free of charge.
According to the notice, the bank’s decision is part of a broader effort to enhance security and ensure smoother digital transactions for customers.
“As part of our ongoing commitment to delivering secure and efficient banking services, we will be phasing out the Ecobank Naira Mastercard,” the statement read.
“In its place, we are pleased to offer you a free Verve debit card to ensure a seamless transition.”
The bank said the Mastercard deactivation would take full effect from September 30, 2025, saying that customers are therefore advised to collect their Verve cards before the deadline to avoid service disruption.
Ecobank also assured customers that the new Verve card would support payments across several digital platforms, including Google Play, YouTube, TikTok, Spotify, Netflix, Prime Video, AliExpress, Zoom, Microsoft, LinkedIn, Starlink, Audiomack, and Uber.
“It will also remain functional for ATM withdrawals and Point-of-Sale (POS) transactions nationwide.
“To obtain the replacement card, customers are instructed to visit the nearest Ecobank branch, request the Verve debit card, and collect it at no cost,” the bank said.
The move follows a growing trend among Nigerian banks to prioritise local card schemes like Verve, which are often more cost-effective and resilient to international payment disruptions.
Central Bank of Nigeria (CBN) has dismissed claims that its recent redeployment of staff from Abuja to Lagos State was politically motivated.
Muhammad Abdullahi, deputy governor, economic policy, made this clarification known at a two-day Interactive Session on Government-Citizens Engagement in Kaduna on Wednesday.
Recall that the CBN had in 2024 rolled out its Early Exit Package (EEP).
As part of the policy, the apex bank reduced its staff strength in Abuja Headquarters.
The decision had been greeted with controversy, with some critics claiming the move was targeted at the banks’ workers from Northern Nigeria.
However, Abdullahi has clarified that the policy was not targeted at anybody.
He noted that a recommendation from the banks’ insurance provider concerning workplace safety triggered its decision to decongest its Abuja headquarters.
“It is not an agenda against anybody,” he stated.
He said, “Some of those staff members taken to Lagos and Kaduna are now so happy they don’t even want to come back to Abuja.
He also dismissed claims that CBN deliberately removed 16 directors, particularly from the Northern region.
“There are many directors from the Northern region currently serving in the bank,” he stated.
He stressed that the son of the country’s secretary to the government of the federation was also redeployed from Abuja to Lagos.
“The son of the Secretary to the Government of the Federation was also moved from Abuja to Lagos. Nobody was spared—it is a policy of the bank,” he stated.
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
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