09/05/2026
Value Added Tax (VAT) in Nigeria, currently at a standard rate of 7.5%, is a key consumption tax that provides significant benefits to the government, businesses, and the economy, particularly under new 2026 tax reforms.
The reforms aim to reduce the tax burden on small businesses and low-income earners, with small company ₦100 million exempt from VAT registration and collection.
Zero-rated VAT
As mentioned earlier, certain goods and services are zero-rated in Nigeria, meaning VAT applies but at a 0% rate—so either way, there’s no additional cost. These include essential items like non-oil exports, goods purchased by diplomats, and humanitarian projects. Some basics, like foodstuffs and medical services, are also exempt from VAT altogether.
This tax relief applies to key sectors, helping keep costs down for items such as:
Agricultural equipment
Basic foodstuffs
Commercial vehicles
Residential rents
Medical supplies
Educational materials
Non-oil exports
Books and newspapers
Machinery in the solid minerals sector
Humanitarian projects
Zero-rated VAT helps reduce the financial burden on essential goods and services, particularly in agriculture, healthcare, and education.
Who is supposed to pay VAT in Nigeria: businesses or individuals?
In Nigeria, VAT is paid by consumers of taxable goods and services. This just means anyone engaging in economic activities—whether you’re a business owner, trader, or service provider. If you’re selling taxable goods or offering services, you’re required to charge VAT and remit it to the authorities.
And yes, even government agencies have to pay VAT. Ministries and statutory bodies, are expected to deduct VAT at the source and pay it directly to the tax office. Alongside VAT, the government collects other taxes like Companies Income Tax (CIT), Withholding Tax (WHT), and Pay As You Earn (PAYE).
This system ensures that both individuals and businesses contribute their fair share.
VAT Filing and Remittance in Nigeria
Once registered, it’s crucial to understand the VAT filing and remittance process. Remitting VAT means paying the net VAT owed to the FIRS, which involves submitting your payment receipts or e-tax payment receipts alongside your VAT returns.
Late filing or failure to remit VAT can lead to penalties and interest charges.
To file and remit VAT in Nigeria, you must:
Ensure your business is registered for VAT with the NRS
Charge 7.5% VAT on all taxable goods and services.
File VAT returns monthly and remit the VAT collected.
Maintain accurate records of sales and purchases to determine your VAT liability.
Staying on top of your VAT obligations is essential to avoid complications with tax authorities. Consider engaging an accountant to ensure accurate VAT filing and timely remittance, giving you peace of mind.
Nigeria Revenue Service - NRS
EG Consultant
