VAT in Nigeria explained for small businesses
Value Added Tax in Nigeria is charged at 7.5% on most goods and services. If your business is registered for VAT, you add it to your prices, collect it from customers and pay it over to the tax authority.
Adding VAT to a price
Multiply the price before VAT by 1.075. A ₦10,000 service becomes ₦10,750, of which ₦750 is VAT.
Taking VAT out of a price
If a price already includes VAT, divide it by 1.075 to find the price before VAT. ₦10,750 divided by 1.075 is ₦10,000, so the VAT inside it is ₦750.
Output and input VAT
The VAT you charge customers is output VAT. The VAT you pay on business purchases is input VAT. In general, you pay over the difference.
Keep good records
- Show VAT separately on every invoice.
- Keep supplier invoices that show the VAT you paid.
- File and pay on time, every month.
Whether you must register, and which items are exempt or zero-rated, depends on your business. Check the Nigeria Revenue Service's guidance or ask your accountant.
Try it
Use our free VAT calculator to add or remove 7.5% VAT from any amount. Profynix invoices show VAT clearly and keep your books current as payments land.