What is the VAT rate in Nigeria?

Nigeria's standard VAT rate is 7.5% as set by the Finance Act 2019 (increased from 5%). This rate applies to most goods and services supplied in Nigeria. Some items are exempt (basic food, medical services, educational materials) and others are zero-rated (non-oil exports, humanitarian relief).

Who must register for VAT in Nigeria?

Any business with annual taxable turnover of ₦25 million or more must register for VAT with FIRS. Businesses below this threshold may register voluntarily. Once registered, you must file monthly VAT returns and remit output VAT minus recoverable input VAT to FIRS by the 21st of the following month.

What items are exempt from VAT in Nigeria?

VAT-exempt items include basic food (unprocessed food, agri produce), medical and pharmaceutical products, educational materials and fees, baby products, agricultural equipment, and financial services (loans, mortgages). Petroleum products also have special treatment under the Petroleum Industry Act.

What is input VAT and output VAT?

Output VAT is the 7.5% you charge your customers on taxable sales. Input VAT is the 7.5% you paid to your suppliers on business purchases. Each month, you remit to FIRS only the net difference: Output VAT minus Input VAT. If your input exceeds output, you can carry the credit forward to the next month.

VAT Calculator Nigeria

Instantly add or remove 7.5% Nigerian VAT, and calculate net VAT payable for your business — FIRS compliant.

Amount Before VAT

Amount (excl. VAT)

₦

VAT Rate

Price Including VAT

₦53,750

Original Amount

₦50,000

VAT Amount (7.5%)

₦3,750

Total (incl. VAT)

₦53,750

How to Use This Calculator

Add VAT Tab

Enter an amount before VAT and the calculator adds 7.5% to give you the VAT-inclusive price. Useful when quoting prices to customers or checking invoices from suppliers who quote exclusive of VAT.

Remove VAT Tab

Enter a VAT-inclusive amount to extract the original price and the VAT component. Use this when you have received a VAT-inclusive invoice and need to separate the tax from the base amount for your records.

Business VAT Tab

Enter your monthly taxable sales and taxable purchases. The calculator shows your output VAT (collected from customers), input VAT (paid to suppliers), and the net amount to remit to FIRS. If your input VAT exceeds output VAT, you have a credit to carry forward.

The Formula

Add VAT: VAT Amount = Original Price × 7.5% Price incl. VAT = Original Price + VAT Amount Remove VAT: Original Price = Inclusive Price ÷ 1.075 VAT Amount = Inclusive Price − Original Price Business Net VAT: Output VAT = Total Sales × 7.5% Input VAT = Total Purchases × 7.5% Net VAT to FIRS = Output VAT − Input VAT

The remove-VAT formula divides by 1.075 (not multiply by 0.075) because the 7.5% is calculated on the original price, not the inclusive price. A common mistake is to multiply the inclusive price by 7.5% which gives a slightly wrong answer.

Example

Scenario: Chioma runs a clothing store in Lagos

Chioma buys stock worth ₦800,000 (excl. VAT) from her supplier and sells garments for ₦2,000,000 (excl. VAT) in the month of April.

Sales (excl. VAT)₦2,000,000

Output VAT (7.5%)₦150,000

Purchases (excl. VAT)₦800,000

Input VAT (7.5%)₦60,000

Net VAT to FIRS₦90,000

Chioma remits ₦90,000 to FIRS by the 21st of May. The ₦60,000 input VAT effectively reduces her tax burden — this is why it is important to collect VAT invoices from all suppliers.

Nigeria VAT: Exempt & Zero-Rated Items

VAT-Exempt Items (no VAT charged, no input VAT recovery)

Basic, unprocessed food items and agricultural produce
Medical and pharmaceutical products
Educational materials (books, stationery)
Baby products (diapers, infant formula)
Agricultural equipment and tractors
Financial services (loans, deposits, insurance)
Residential rent and land use

Zero-Rated Items (0% VAT, but input VAT can be recovered)

Non-oil exports
Goods and services supplied to diplomats and foreign missions
Humanitarian goods in emergency situations

FIRS VAT Registration

Businesses with annual turnover of ₦25 million or more must register for VAT with FIRS. Registration is done online at firs.gov.ng. Once registered, you receive a Tax Identification Number (TIN) and must file a VAT return (Form 002) monthly, by the 21st of the following month.

FAQ

The VAT rate was increased from 5% to 7.5% under the Finance Act 2019, signed by President Buhari in January 2020. The increase took effect from 1 February 2020. Nigeria had maintained a 5% rate since VAT was introduced in 1993.

Businesses below the ₦25 million threshold are not required to register for VAT but also cannot recover input VAT on their purchases. You may voluntarily register — which allows you to recover input VAT — but obligates you to file monthly returns. Many small businesses below the threshold still find voluntary registration beneficial.

Failure to remit VAT is an offence under the VAT Act. Penalties include: 10% of the tax due per month of default, plus interest at the prevailing CBN minimum rediscount rate. Criminal prosecution is also possible for persistent non-remittance. FIRS regularly audits businesses and can demand up to 6 years of back-taxes.

Yes. VAT is charged on imported goods and services at the point of entry into Nigeria. For physical goods, it is collected by Customs as part of the clearing process (7.5% on the aggregate CIF + duty value). For imported services (digital services, software subscriptions, consulting fees paid abroad), the Nigerian recipient is responsible for self-accounting for VAT under the reverse charge mechanism.

No. Input VAT on motor vehicles purchased for private or partly private use cannot be recovered. If a vehicle is used exclusively for business (e.g. a delivery van or company bus), input VAT recovery may be possible but will be scrutinised during audits. Consult a tax advisor for your specific situation.