What is the VAT rate in Nigeria?

The standard VAT rate in Nigeria is 7.5%, which has been in effect since February 2020. This rate applies to most goods and services unless specifically exempted.

What goods and services are VAT exempt?

Exempt items include basic food items (unprocessed agricultural products), medical and pharmaceutical products, educational materials, baby products, and exported goods (zero-rated).

When must I file VAT returns?

VAT returns must be filed monthly by the 21st day of the following month. For example, January VAT is due by February 21st.

Can I claim input VAT?

Yes, you can offset VAT paid on business purchases (input VAT) against VAT collected from sales (output VAT). Only the net amount is remitted to FIRS.

Do I charge VAT on services to foreign clients?

Services exported to foreign clients are zero-rated, meaning you charge 0% VAT but can still claim input VAT credits. Keep documentation proving the export.

What happens if I'm below the threshold but want to register?

You can voluntarily register for VAT. This allows you to claim input VAT credits and may enhance your credibility with larger clients who prefer VAT-registered suppliers.

VAT Guide Nigeria 2026: Registration, E-Invoicing & Compliance

What is VAT (Value Added Tax)?

Quick Answer

VAT is a 7.5% consumption tax charged on goods and services. Businesses with annual turnover above ₦50 million must register, collect VAT from customers, and remit to FIRS monthly.

Registration Threshold

You must register for VAT if your annual turnover exceeds ₦50 million. This threshold was raised from ₦25 million under the Nigeria Tax Act 2025.

Who Must Register for VAT (Value Added Tax)?

Businesses with annual turnover above ₦50 million

Companies that supply VATable goods or services

Importers of taxable goods (regardless of turnover)

Companies that voluntarily choose to register (even below threshold)

How to Register for VAT (Value Added Tax)

Get Your TIN

Ensure you have a valid Tax Identification Number from FIRS.

Complete VAT Registration Form

Fill out the VAT registration form on the FIRS TaxPro Max portal or at your nearest FIRS office.

Submit Required Documents

Provide CAC registration, TIN certificate, utility bills, and bank account details.

Receive VAT Registration Number

FIRS will issue your VAT registration number within 14 working days.

Start Charging VAT

Begin adding 7.5% VAT to your invoices and keeping proper records.

VAT Rates & Categories

Standard Rate: 7.5%

Applies to most goods and services including electronics, furniture, professional services, telecommunications, and entertainment.

Zero Rate: 0%

Exports of goods and services, humanitarian donor-funded projects. You charge 0% but can still claim input VAT credits.

Exempt: No VAT

Medical services, educational services, basic food items, baby products, agricultural equipment, books and newspapers.

Filing & Payment

Deadline: File and pay VAT returns by the 21st of each month for the previous month's transactions.

Monthly Filing Process

1Calculate total output VAT (VAT charged to customers)
2Calculate total input VAT (VAT paid on business purchases)
3Compute net VAT (output - input = amount to remit)
4File return on FIRS TaxPro Max portal
5Pay net VAT through designated bank

Input VAT vs Output VAT

Type	Definition	Example
Output VAT	VAT you charge customers on your sales	You sell ₦100,000 service + ₦7,500 VAT = Output VAT is ₦7,500
Input VAT	VAT you pay on business purchases	You buy ₦50,000 supplies + ₦3,750 VAT = Input VAT is ₦3,750
Net VAT	Output VAT minus Input VAT	₦7,500 - ₦3,750 = ₦3,750 to remit to FIRS

Tip: If your input VAT exceeds output VAT (common for exporters), you can carry forward the credit to future periods or apply for a refund.

Compliance Checklist

Charge 7.5% VAT on all taxable supplies

Issue proper VAT invoices with your VAT number

Keep records of all VAT charged and paid

File monthly VAT returns by the 21st

Remit net VAT (output minus input) to FIRS

Maintain records for at least 6 years

Track Compliance with KeepAm

Penalties for Non-Compliance

Violation	Penalty	Notes
Failure to register	₦50,000 first month + ₦25,000 each subsequent month	-
Late filing of returns	₦50,000 for the first month + ₦25,000 each subsequent month	-
Failure to collect VAT	100% of uncollected tax + penalty interest	-
Late payment of VAT	10% of amount outstanding + interest	-
Failure to issue VAT invoice	50% of invoice value	-

Avoid penalties: Set up reminders for all filing deadlines. KeepAm sends automatic notifications before each due date.

Frequently Asked Questions

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VAT (Value Added Tax): Complete Guide for Nigeria 2026