VAT in Nigeria: Rates, Returns and Record-Keeping

The VAT Act is gone. Since 1 January 2026, value added tax in Nigeria sits inside the Nigeria Tax Act 2025, and the Nigeria Tax Administration Act 2025 sets out how it is filed and enforced (Forvis Mazars). The rate didn't move. What moved is what you can claim back, who administers it, and how much a late return costs.

The rate: still 7.5%

Earlier proposals to raise VAT were dropped. The standard rate stays at 7.5% of the value of a taxable supply. On a ₦1,250,000 invoice, that is ₦93,750 of VAT and ₦1,343,750 in total. If you need a refresher on what the invoice itself must show, start with how to write a professional invoice.

Zero-rated, exempt, and why the difference matters

Not every supply carries 7.5%. Summaries of the Act place the following among zero-rated supplies: basic food items, medical and pharmaceutical products, medical services, educational books and materials, and exports other than oil and gas (Kintsugi).

The distinction that matters to your cash:

A note of caution. Secondary guides don't agree on which list some items sit in; one guide marks groceries "exempt" in a table and "zero-rated" in its text. If your business sells food, medicine or education materials, confirm the treatment against the schedules in the Act itself or with your tax adviser before you set up your price list.

Input VAT: the change most businesses will feel

Under the old law, VAT paid on services and on fixed assets mostly couldn't be claimed back; service businesses simply expensed it. The Nigeria Tax Act now allows input VAT on any taxable supply, including services and fixed assets, to the extent it is used to make taxable supplies (Forvis Mazars). If input VAT exceeds output VAT in a month, the excess carries forward as a credit against later months.

There is a second, less obvious rule. The Act makes paying VAT on a taxable supply a condition for deducting the related expense for income tax. Put simply: an expense where VAT should have been charged and wasn't may not be deductible. That turns supplier invoices from a nice-to-have into evidence you need.

Who has to file

Every taxable person files a monthly VAT return, with one exception. A small business, described in the Tax Administration Act as having gross turnover of ₦100 million or less a year and fixed assets under ₦250 million, is exempt from filing VAT returns (Forvis Mazars). Professional services firms are excluded from the small-business definition in several readings, and some commentary quotes a ₦50 million figure instead. Treat the threshold as one to confirm, not assume.

A small business can opt out of the exemption by written notice. That can make sense if your customers are VAT-registered companies who want a VAT invoice, or if you buy enough taxable inputs to claim a refund.

When and how to file

• Deadline: the return is due by the 21st day of the month after the month of the transactions (Banwo & Ighodalo; the Act itself is in the Official Gazette).
• Where: with the Nigeria Revenue Service, the successor to FIRS. Since 30 April 2026 the NRS has been moving filing from TaxPro Max to its Rev360 platform, which uses structured return templates (Mondaq). Some taxpayer groups were told to stay on TaxPro Max in the interim, so check which portal applies to you.
• Late filing: reported at ₦100,000 for the first month and ₦50,000 for each month after (BusinessDay). A nil return is still a return; file it.

A month, worked through

Adebayo & Co. Logistics, Ikeja, October 2026.

Output VAT (charged to customers)

• Taxable sales: ₦8,400,000 × 7.5% = ₦630,000

Input VAT (paid to suppliers, used for taxable supplies)

• Diesel and vehicle parts: ₦2,000,000 × 7.5% = ₦150,000
• Audit and IT services: ₦800,000 × 7.5% = ₦60,000
• A new forklift (fixed asset): ₦400,000 × 7.5% = ₦30,000
• Total input VAT: ₦240,000

VAT payable: ₦630,000 − ₦240,000 = ₦390,000, due with the return by 21 November 2026. That date is a Saturday, so check with the NRS or your adviser whether the deadline moves to the next working day or stays put, and file early to be safe.

Under the old rules, the ₦60,000 on services and the ₦30,000 on the forklift wouldn't have been claimable, and the payment would have been ₦480,000. The new rules save this business ₦90,000 for the month, but only if those supplier invoices exist and show VAT properly.

Record-keeping: what to keep

For every month, keep enough that someone else could rebuild the return:

• Sales invoices with your TIN, the customer's details, the VAT amount shown separately, and the invoice number in sequence.
• Supplier invoices showing VAT, for every input VAT claim.
• Credit notes, linked to the invoice they reduce.
• Receipts and payment records, especially if you report on a cash basis.
• The return as filed and the payment evidence.

With NRS e-invoicing rolling out by business size, more of this record will also exist on the tax authority's side. Your books and theirs should match.

How Flux helps

Flux Invoicing calculates VAT on every invoice line and shows it separately on the PDF. Flux Tax & Reporting produces a cash-basis VAT report and lets you download the return in the NRS Rev 360 format, so the monthly figure comes from your invoices and payments rather than a rebuilt spreadsheet. Flux prepares and exports the figures; you file and pay through the NRS, and you should confirm your filings with your tax adviser. See Tax & Reporting.