Value Added Tax (VAT)
VAT is governed by Value Added Tax Act Cap V1, LFN 2004 (as amended)
- VAT is a consumption tax paid when goods are purchased and services rendered
- It is a multi-stage tax
- VAT is borne by the final consumer
- All goods and services (produced within or imported into the country) are taxable except those specifically exempted by the VAT Act
- VAT is charged at a rate of 7.5%
- Some goods and services such as non-oil exports are zero rated
- All taxable persons are required to file VAT monthly returns not later than 21st day following the month of transaction
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Under the Nigerian VAT regime, three groups of taxpayers are obligated to deduct VAT at source and remit directly to the tax authority. These are:
- Nigerian companies that are carrying on VATable transactions with non-resident companies within the country;Â
- Government ministries, statutory bodies and other agencies of government; and
- Companies operating in the oil and gas sector.
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