Value Added Tax (VAT) is a consumption tax charged on most goods and services in Nigeria. If your business sells taxable supplies, you collect VAT on behalf of the Nigeria Revenue Service (NRS) and remit it every month. Getting this rhythm right is one of the simplest ways to stay out of trouble — and one of the most common places small businesses slip.
Who has to register for VAT
Registration is an obligation, not a choice. A business is expected to register for VAT with the NRS on incorporation or when it begins trading, obtain a Taxpayer Identification Number (TIN), and start charging VAT on its taxable supplies. Certain items — such as basic food, medical and pharmaceutical products, and educational materials — are exempt or zero-rated, so the first step is understanding whether what you sell is taxable at all.
How the rate works
The standard VAT rate is 7.5%. You add it to the price of your taxable supplies (this is your output VAT) and you pay it on the taxable goods and services you buy for the business (this is your input VAT). What you remit to the NRS each month is the difference between the two.
Output VAT you charged, minus input VAT you paid on business purchases, equals the amount you remit to NRS.
The deadline that matters
VAT returns are filed monthly. The return and payment for a given month are due on or before the 21st day of the following month. Late filing and late payment both attract penalties and interest, and they accumulate — so a missed month is not something that quietly goes away.
- Keep your sales and purchase records current so the return is a summary, not a scramble.
- Separate exempt and zero-rated supplies from standard-rated ones.
- Reconcile the VAT you collected against the VAT in your bank account before you file.
- File even in a month where you owe nothing — a nil return is still a return.
Where a firm helps
Most VAT problems are record-keeping problems in disguise. When your books are reconciled monthly, filing becomes routine. We manage VAT registration, monthly filings, and reconciliation for clients so the deadline is handled before it arrives — and so any refund position is actually claimed rather than lost.