VAT in Nigeria: 7.5% Rate, Exemptions and Input VAT
A plain guide to VAT: what is charged, the zero-rated and exempt lists, how input VAT works and what invoices need.
Based on the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025, in force from 1 January 2026.
In 30 seconds
VAT is charged at 7.5% on taxable supplies of goods and services in Nigeria (section 147). A business charges output VAT on its sales, deducts the input VAT it paid on purchases, and pays the difference.
Some supplies are zero-rated (section 186). Others are exempt (section 185). The difference matters for input VAT.
7.5%Standard VAT rate
0%Zero-rated supplies, such as basic food
5 yearsTo claim input VAT
14thWithheld VAT is due, next month
What is VAT in Nigeria?
VAT is value added tax. It is a tax on the sale of goods and services. The seller adds it to the price and pays it over to the tax authority. The buyer carries the cost.
The rate is 7.5% (section 147). The Nigeria Revenue Service (NRS) administers VAT.
The VAT rate in Nigeria and what is charged
VAT is paid on all taxable supplies in Nigeria, subject to the exemptions in Part IV of Chapter Eight (section 144).
A supply is treated as made in Nigeria in several cases (section 145).
Goods: they are in Nigeria, imported into it, or assembled or installed there when supplied.
Services: they are provided to and used by a person in Nigeria, even if they are performed abroad. Services linked to land or buildings in Nigeria also count.
Incorporeal property: a right is used by a person in Nigeria, or registered or acquired in Nigeria.
How the value is worked out
Money consideration: the value is the amount which, with the VAT added, equals the price (section 148(1)(a)).
Connected persons: the market value is the price at arm's length (section 148(3)).
Imports: the price plus taxes and duties other than VAT, and commission, packing, transport and insurance to the port of entry (section 149).
How to calculate VAT in Nigeria
Price before VAT: multiply by 7.5%. A price of N100,000 carries N7,500 of VAT, so the customer pays N107,500.
Price that already includes VAT: divide by 1.075 to find the price before VAT. A price of N107,500 includes N7,500 of VAT.
Section 148(1)(a) treats a money price as the amount that, with the VAT added, equals what the buyer pays. That is why a VAT-inclusive price works backwards.
When VAT arises
A taxable supply is treated as made at the earliest of three points. These are the issue of an invoice or receipt, the delivery of goods or their release for use, and the time payment is due or received (section 146(1)).
VAT invoices
A taxable person must number invoices in sequence. Each VAT invoice must show these details (section 152).
The supplier's tax ID, name and address.
The invoice number and the supplier's registration number.
The date of supply and the name of the purchaser.
The gross amount, the VAT charged and the rate.
An invoice is issued whether or not payment is made on the day. The Service can require electronic invoicing on 30 days' notice. Taxable persons must also use the fiscalisation system the Service deploys (section 157).
Output VAT, input VAT and credit
VAT you charge on sales is output VAT (section 153). VAT you pay on purchases is input VAT (section 151).
In each period you compare the two (section 155(1)). If output is higher, you pay the excess. If input is higher, you carry the excess forward as a credit. You can ask for a refund of any excess you cannot use (section 155(2)).
Example
Amount
Sales for the month, before VAT
N10,000,000
Output VAT at 7.5%
N750,000
Purchases for the month, before VAT
N4,000,000
Input VAT at 7.5%
N300,000
VAT to pay
N450,000
Rules on input VAT
Input VAT on goods, services and fixed assets can be deducted. The purchase must be for making taxable supplies (section 155(4)).
If you make taxable and non-taxable supplies, only the taxable share can be deducted.
You can claim within five years after the end of the period in which it was incurred.
An importer pays the VAT before clearing the goods (section 155(3)).
VAT refunds: how to claim
You can claim a refund where input VAT is more than output VAT and you do not want to carry it forward (section 155(2)). The NRS refund guidelines add the rules.
Apply within 12 months of the transaction that gave rise to the claim. After that, the right to the refund is lost.
The NRS must refund, or set off against other tax, within 30 days of a valid request.
Attach a schedule of the claim, proof of remittance, the NRS receipt and your VAT invoices. Add import duty papers if the goods were imported.
Input VAT on exempt supplies cannot be claimed. Treat it as an expense.
A false VAT refund claim is penalised at 100% of the amount refunded, plus interest at the Central Bank's Monetary Policy Rate.
Source: NRS Information Circular 2026/17.
Zero-rated supplies
A zero-rated supply is taxable at 0%. You charge no VAT, but you can still recover input VAT. Section 186 lists these.
Basic food items.
Medical and pharmaceutical products, medical services and medical equipment.
Educational books and materials, and tuition from nursery to tertiary level.
Fertilisers, locally produced agricultural chemicals, veterinary medicine and animal feeds.
Live cattle, goats, sheep and poultry, and agricultural seeds and seedlings.
Electricity from generation companies to the grid, and from the transmission company to distribution companies.
Exported goods other than oil and gas, exported services and exported incorporeal property.
Exempt supplies
An exempt supply carries no VAT, and the input VAT on costs of making it is not recoverable. Section 185 lists these.
Oil and gas exports, crude petroleum and feed gas.
Baby products and locally made sanitary towels, pads and tampons.
Military hardware and uniforms supplied to security agencies.
Shared passenger road transport.
Tractors, ploughs and other farm equipment, whether bought, hired or leased.
Land and buildings, and money and securities.
Government licences.
Assistive devices and disability-related products.
Supplies to free zone entities for their approved activity, and supplies to diplomatic missions.
Zero-rated or exempt? Both mean no VAT for the customer. The difference is on your side. A zero-rated seller recovers input VAT. An exempt seller does not.
Items that start later
The Eleventh Schedule lists items on which VAT starts later. They are petroleum products, renewable energy equipment, compressed natural gas, liquefied petroleum gas and other gaseous hydrocarbons. Charging starts on a date the Minister sets by order (section 185(2)). The Minister may also class gas conversion equipment and services as exempt or zero-rated.
Non-resident suppliers
A non-resident who makes taxable supplies to Nigeria must register and include VAT on its invoices (section 150(1)). Where it does not, the Nigerian taxable person withholds the VAT and remits it (section 150(2)). The Service can also appoint a person to collect it (section 150(3)).
VAT withheld by others
Government bodies and anyone the Service appoints must collect or withhold VAT on supplies made to them. The Service can also direct a buyer to self-account where an invoice carries no VAT (section 154).
The VAT must be remitted on or before the 14th day of the month after the transaction, or as the Service prescribes (section 154(4)). The remittance comes with a schedule of supplier names, tax IDs, invoice numbers and amounts.
NRS guidance issued in June 2026 is reported to require agents to file separate returns for withheld VAT and to keep a VAT Withheld Account in their books.
VAT registration and your Tax ID
A taxable person registers with the NRS. The Tax ID then appears on every VAT invoice (section 152(1)(a)).
The registration rules sit in the Nigeria Tax Administration Act. Check the NRS portal for the current process and thresholds.
Filing and paying
Filing dates are in the Nigeria Tax Administration Act. The NRS tax calendar sets VAT for the 21st of the month after the transaction. A return is due even when there is nothing to report, as reported.
The NRS issued Information Circular 2026/05 on 29 June 2026. It covers time of supply, place of supply, input and output VAT, VAT withholding agents and the electronic fiscal system.
Basic food, medical products and services, educational books and tuition, fertilisers, farm inputs, live animals, certain electricity supplies and exports (section 186).
What is the difference between zero-rated and exempt?
Both mean the customer pays no VAT. A zero-rated seller can recover input VAT. An exempt seller cannot recover input VAT on the costs of the exempt supply.
Can I claim input VAT on services and fixed assets?
Yes, if they are used to make taxable supplies. Claim within five years after the end of the period (section 155(4)).
When must withheld VAT be paid?
On or before the 14th day of the month after the transaction, or as the Service prescribes (section 154(4)).
Do foreign digital sellers charge Nigerian VAT?
A non-resident who supplies taxable goods or services to Nigeria must register and charge VAT, or the Nigerian buyer withholds it (section 150).
When is the VAT return due?
By the 21st of the month after the transaction, according to the NRS tax calendar.
How do I claim a VAT refund in Nigeria?
Apply to the NRS within 12 months of the transaction. The NRS must refund or set off within 30 days of a valid request. Input VAT on exempt supplies cannot be claimed.
How do I work out VAT from a VAT-inclusive price?
Divide the price by 1.075 to get the price before VAT. The difference is the VAT. A price of N107,500 includes N7,500 of VAT.
A taxable supply shall be deemed to take place in Nigeria where, in respect of —
(a)
goods —
(i)
the goods are physically present, imported into, assembled or installed in Nigeria at the time of supply ; or
(ii)
the beneficial owner of the rights in or over the goods is a taxable person in Nigeria and the goods or right is situated, registered or exercisable in Nigeria ;
(b)
a service —
(i)
the service is provided to and consumed by a person in Nigeria, regardless of whether the service is rendered within or outside Nigeria or whether or not the legal or contractual obligation to render such service rests on a person within or outside Nigeria, or
(ii)
the service is connected with existing immovable property, including the services of agents, experts, engineers, architects, valuers, etc., where the property is located in Nigeria ; and
(c)
an incorporeal —
(i)
the exploitation of the right is made by a person in Nigeria or whose place of usual residence is Nigeria,
(ii)
the right is registered in Nigeria, assigned to or acquired by, a person in Nigeria, regardless of whether the payment for its exploitation is made within or outside Nigeria, or
(iii)
the incorporeal is connected with a tangible or immovable asset located in Nigeria.
For the purposes of Chapter Six of this Act, a taxable supply shall be deemed to take place at the time an invoice or receipt is issued by the supplier, or where goods are delivered or made available for use, or payment is due to or received by the supplier in respect of that supply, whichever occurs first.
(2)
A taxable supply shall be deemed to take place where the supplier and recipient are connected persons and invoices are not issued, in the case of –
(a)
a supply of goods which are to be removed, the time of removal of the goods ;
(b)
a supply of goods which is not to be removed at the time when they are available to the recipient ;
(c)
furnishing of a service, upon commencement of the furnishing of the service ; or
(d)
an incorporeal, when such incorporeal becomes available for the use of the recipient.
(3)
Notwithstanding the provisions of subsections (1) or (2) of this section –
(a)
where goods are supplied under any rental agreement or where services are furnished under any agreement or law which provides for periodic payments, they shall be deemed to be successively supplied for successive parts of the periods of the agreement or as determined by such law, and each of the successive supplies shall be deemed to occur when payment becomes due or is received, whichever is earlier ;
(b)
where, and to the extent that, taxable supplies are –
(i)
progressively or periodically made under any agreement or law which provides for the consideration for that supply to be paid in instalments or periodically and in relation to the progressive or periodic supply, or
(ii)
made in relation to any construction, assembly, manufacturing, alteration, improvement or repair activity under any agreement or law which provides for the consideration for that supply to become due and payable in instalments or periodically in relation to the progressive nature of the work, the supplies shall be deemed to be successively made, and each successive supply shall be deemed to take place whenever any payment becomes due or is received or an invoice relating to only that payment is issued, whichever occurs first; and
(c)
where a taxable supply is made under an instalment credit agreement, the supply shall be deemed to take place at the time the taxable supply is delivered or the time any payment of consideration is received by the supplier in respect of the supply, whichever occurs first.
For the purposes of Chapter Six of this Act, the value of taxable supplies shall be determined as follows, where the supply is —
(a)
for a money consideration, its value shall be the amount which with the addition of the VAT chargeable is equal to the consideration ; and
(b)
not for a money consideration, the value of the supply shall be its market value.
(2)
Where a taxable supply is not the only transaction to which a consideration relates, the supply shall be the part of the consideration as is properly attributable to it.
(3)
For the purposes of Chapter Six of this Act, the market value of a taxable supply, where it is not for money consideration, or for a supply between connected persons, shall be the money consideration as may be payable by a person in a transaction at arm's length.
The value of imported taxable supply for the purposes of Chapter Six of this Act shall be the amount which is equal to the price of the taxable supply imported plus —
(a)
taxes, duties and other charges levied either outside or by reason of importation into Nigeria, other than VAT imposed under this Act ; and
(b)
costs by way of commission, parking, transport and insurance up to the port or point of entry.
A non-resident person who makes taxable supplies to Nigeria shall register for tax and include VAT on its invoice for all taxable supplies.
(2)
Where a non-resident person is making taxable supplies from outside Nigeria to persons in Nigeria, the taxable person to whom the supply is made in Nigeria shall withhold the VAT due on the supply and remit it to the Service.
(3)
The Service may, by notice, appoint any person, including a non-resident supplier of taxable supplies, to collect the VAT and remit it to the Service.
(4)
Where a person appointed under subsection (3) has made a taxable supply to a taxable person in Nigeria, the taxable person shall not have the obligation to withhold the VAT, except where the person appointed has failed to collect the VAT.
(5)
Where a person appointed under subsection (3) does not process payments in respect of the supplies but receives commission relating to the supplies, the appointed person shall use the mechanism with which it collects its commission to collect the VAT.
(6)
A non-resident person that makes a taxable supply to a person in Nigeria may appoint a representative for the purpose of compliance with its VAT obligations.
(7)
The Service may issue guidelines for the purpose of giving effect to the provisions of this section, including the form, time and procedure for filing returns and payment by non-resident suppliers appointed by the Service under subsection (3).
(8)
Where taxable goods are imported into Nigeria through an online electronic or digital platform operated by a non-resident supplier and VAT has been collected by the Service or any person appointed by the Service, the goods shall not be further subjected to VAT before clearing upon provision of proof of payment of the VAT.
A taxable person who makes a taxable supply shall maintain a sequential invoice numbering, and shall in respect of a supply, furnish the purchaser with a VAT invoice containing, the following —
(a)
supplier's tax ID ;
(b)
name and address of the supplier and sequential invoice number ;
(c)
supplier's incorporation or business registration number as applicable ;
(d)
the date of supply ;
(e)
name of purchaser or client ;
(f)
gross amount of transaction ; and
(g)
VAT charged and the rate.
(2)
VAT invoice shall be issued on supply whether or not payment is made at the time of supply.
(3)
VAT invoice shall be issued by a taxable person making a taxable supply or such other person as may be appointed by the Service.
(4)
For the purpose of subsection (1), the Service may direct any taxable person who makes taxable supplies to adopt the use of electronic invoice, provided that it gives a notice of, at least 30 days to the person.
Section 154 Collection of VAT by persons other than the supplier
(1)
Without prejudice to any provision of this Act or any other tax law, the following persons shall collect or withhold VAT on taxable supplies made to them and remit it to the Service within the time prescribed by this Act, the Nigeria Tax Administration Act, or any regulation made pursuant thereto —
(a)
Federal, State, Local Government and their respective Ministries, Departments or Agencies; or
(b)
any other person appointed by the Service to collect or withhold VAT for the purposes of this Part.
(2)
The Service may direct a taxable person to whom taxable supplies is made in Nigeria and issued an invoice on which VAT is not included, to self-account for the VAT payable and remit it to the Service.
(3)
The remission of the VAT under subsections (1) and (2) of this section, shall be accompanied with a schedule showing the name, Tax ID and address of the contractor or supplier, invoice number, gross amount of invoice, amount of the VAT and the month to which the return relates.
(4)
The VAT collected, withheld or self-accounted under this section shall be remitted to the Service on or before the 14th day of the month immediately following the month of the transaction or as may be prescribed by the Service.
(5)
A person having an obligation to collect VAT under Chapter Six of this Act shall keep proper records, make appropriate returns and remittances, and all provisions relating to compliance obligation in Chapter Six of this Act, the Nigeria Tax Administration Act or related tax laws shall apply to such person as though it is the taxable person.
Section 155 Credit for input tax and remission of VAT
(1)
A taxable person shall, not later than the due date for rendering the relevant tax return prescribed by the Nigeria Tax Administration Act, where the —
(a)
output VAT exceeds the input VAT, remit the excess to the Service ; or
(b)
input VAT exceeds the output VAT, be entitled to utilise the excess tax as a credit against subsequent months.
(2)
A taxable person shall be entitled to a refund of excess VAT not utilised as a credit, upon request to the Service and provision of such information or documents as the Service may require.
(3)
An importer of taxable goods shall, before clearing those goods, pay to the Service the VAT on the goods.
(4)
Input tax incurred by a registered person on any taxable supply, including services and fixed assets made to such person, may be deducted from the tax payable by the person on its taxable supplies at the end of the tax period in which the supply occurred, but only to the extent that the input tax was incurred for the purpose of consumption, use or supply in the course of making taxable supplies.
Provided that —
(a)
where any input tax is incurred in making both taxable and non-taxable supplies, only the proportion relating to making taxable supplies may be deducted ;
(b)
the input tax shall be allowable for deduction within five years after the end of the tax period in which the input tax was incurred.
(5)
The input tax which may be deducted in line with subsection (4) of this Section shall be limited to taxable supplies made as from the commencement of this Act.
The following supplies are exempt from the VAT imposed under Chapter Six of this Act —
(a)
oil and gas exports ;
(b)
crude petroleum oil and feed gas for all processed gas ;
(c)
goods purchased for use in humanitarian donor funded projects provided that the humanitarian donor shall first pay the VAT and request a refund from the Service ;
(d)
baby products ;
(e)
locally manufactured sanitary towels, pads or tampons ;
(f)
military hardware, arms, ammunitions and locally manufactured uniforms supplied to armed forces, para-military and other security agencies of a Nigerian government ;
(g)
shared passenger road-transport service ;
(h)
purchase, hire, rental or lease of tractors, ploughs and other equipment used for agricultural purposes.
(i)
supplies consumed by an approved entity in the export processing or free trade zones, provided that the supplies are consumed on its approved activity ;
(j)
goods or services supplied to a diplomatic mission, diplomat or person recognised under the Diplomatic Immunities and Privileges Act whose activity is in public interest, and not for profit ;
(k)
plays and performances conducted by educational institutions as part of learning ;
(l)
land or building including interest in land or building ;
(m)
money, stakes or securities including interest in money or securities ;
(n)
Government licences ; and (o)Assistive devices and disability-related products including hearing aids, wheelchairs, and braille materials.
(2)
Notwithstanding the provisions of Chapter Six of this Act, VAT shall not be collected on the items specified in paragraph 1 of the Eleventh Schedule to this Act except where the Minister by an order, published in the Federal Government Gazette, specifies the date of collection of VAT on the items listed in the order.
Refund rules are from NRS Information Circular 2026/17; filing dates are from the NRS tax calendar. Source for the Act: Nigeria Tax Act, 2025 (Act No. 7 of 2025), Official Gazette No. 117, Lagos, 26 June 2025. General information, not tax or legal advice.