VAT (Value Added Tax) — Regulatory Reference¶
Last reviewed: 2026-04-01
Overview¶
VAT is a consumption tax at 7.5% on the supply of taxable goods and services in Nigeria. Administered by NRS (Nigeria Revenue Service, formerly FIRS) under NTAA 2025.
Key Facts¶
| Item | Detail |
|---|---|
| Rate | 7.5% |
| Authority | NRS (federal) |
| Filing | Monthly |
| Due date | 21st of the month following the taxable period |
| Portal | NRS TaxPro-Max |
| Late penalty | 10% of net VAT payable + interest at CBN MPR |
Registration Threshold (NTAA 2025 §147)¶
- Businesses with annual turnover ≤ ₦100M AND gross assets ≤ ₦250M are not required to register for VAT
- This is the "small business" threshold — distinct from the "small company" CIT threshold (₦50M)
- PSOs (accountants, lawyers, consultants, architects) are excluded from this exemption regardless of turnover
How VAT Works¶
- Output VAT: 7.5% charged on sales → collected from customers
- Input VAT: 7.5% paid on purchases → paid to suppliers
- Net VAT: Output − Input = amount remitted to NRS
- If Input > Output → VAT credit (claimable from NRS)
Exempt and Zero-Rated Supplies¶
| Category | Treatment | Input VAT Recovery |
|---|---|---|
| Exempt (medical, basic food, education, baby products, agriculture) | No VAT charged | Not recoverable |
| Zero-rated (exports, diplomatic purchases) | 0% VAT charged | Recoverable |
| Standard (everything else) | 7.5% VAT charged | Recoverable |
Cash Basis vs Accrual Basis¶
- Cash Basis: Output VAT recognised on payment receipt — recommended for SMEs (avoids remitting VAT on unpaid invoices)
- Accrual Basis: Output VAT recognised on invoice issuance — required for larger businesses
- Finora supports both; selectable when generating VAT returns
Where This Appears in Finora¶
- VAT Returns (
/tax/vat-returns) — monthly returns with Output/Input schedules - Tax Compliance (
/tax/compliance) — "VAT NOT REQUIRED" for small businesses - Tax Calendar (
/tax/calendar) — 21st deadline reminders - Tax Reports (
/tax/reports) — VAT compliance status - Filing Services (
/tax/filing-services) — VAT/WHT Combo filing ₦9,500 - Business Settings (
/settings) — VAT display on invoices (Separate / Inclusive / Hidden)