Value Added Tax (VAT) FAQ

Value Added Tax (VAT) is a tax levied on consumption of goods and services.

The VAT Act CAP.VI LFN 2014 requires that you pay VAT on all goods manufactured /assembled in or imported into Nigeria, and all services rendered by any person in Nigeria except those specifically exempted under the law as follows: basic (raw) food items, baby products, medical services and services rendered by Community Banks etc.​

7.5 Percent

On or before the 21st day of the month following the month of transaction.​

i. Evidence of payment such as bank teller, e-ticket, e-acknowledgement etc. from an FIRS designated revenue collecting bank
ii. Completed VAT Returns Form 002 (for individuals, enterprises and companies)
iii. Schedule of VAT collected indicating the: Name, Taxpayer Identification Number (TIN) of company or individual on whose transaction the VAT was charged and the related amount.

Both individual and corporate bodies so long as they are trading in goods and services.

Once you register with the FIRS by completing Taxpayer Registration Input Form, submit copies of prescribed documents and obtain Taxpayer Identification Number (TIN), you are automatically registered and authorized to collect VAT.​

All taxable persons are expected to register for VAT immediately they are registered with Corporate Affairs Commission (CAC) or commencement of business.​

No. Ministries do not have statutory power to exempt a taxpayer from payment of tax or to amend the tax laws.

A VATable person under Value Added Tax Act (VATA) Cap VI LFN 2004 is “a person (other than a Public Authority acting in
that capacity) who independently carries out in any place an economic activity as a producer, wholesaler, trader, supplier
of services (including mining, and other related activities) or person exploiting tangible or intangible property for the
purpose of obtaining income by way of trade or business”.
In other words, a VATable person is one who trade in VATable goods and services for a consideration.

Every VATable person has an obligation to register for VAT payment.

VAT AGENT: - Are agents of Revenue Collection with regards to Value Added Tax. They facilitate the
deduction and remittance of VAT to the Revenue Office e.g. Ministries/Government Agencies/Parastatals
and Oil companies

All services rendered by any person in Nigeria except those specifically exempted under the law. Examples
of VATable services are, services rendered by Lawyers, Engineers, Accountants, Contractors and
Consultants etc.

The issue of input/output VAT cannot be resolved by Government Ministries/Departments/Agencies.
However, for further clarification FIRS should be consulted.

Services provided by mechanics are VATable. Even the motor or vehicle spare parts used for the services
are subject to VAT.

Every VATable person has an obligation to register for VAT payment.

Goods exempted from VAT are not VATable.

Exempted goods are those goods which are not subject to VAT.
These include:

1. All medical and pharmaceutical products;
2. Basic food items;
3. Books and Educational materials;
4. Baby products;
5. Fertilizer (locally produced), agricultural and veterinary medicine, farming machinery and
   farming transportation equipment;
6.  Plant and Machinery imported for use in the Export Processing Zone or Free Trade Zone; provided
   that 100% production of such company is for export
7.  Plant, machinery and equipment purchased for utilization of gas in down-stream petroleum
   operations.
   
   
8. Tractors, plough and agricultural equipment and implements purchased for agricultural purposes.
9. Proceeds from the disposal of Short-Term Federal Government of Nigeria Securities and Bonds.
10. Proceeds from the disposal of Short-Term State, Local Government and Corporate Bonds
    (including supra-national Bonds)” Limited to ten years with effect from December 2011

Taxes are to be paid in the currency of transaction.