Value Added Tax (VAT)
Scope of coverage
All entities dealing on taxable supplies.
Rate of Tax
The rate is 7.5% of all VATable invoices with exemption for entities (Small Businesses) with turnover below N25 million.
Value Added Tax Act Cap V1, LFN 2004, as amended to date.
Recent Amendments –
- Increase of VAT rate from 5% to 7.5% (from 1st February 2020)
- Penalties associated with failure to register; file & notification of cessation/change of address is N50,000 in the first month of default and N25,000 for subsequent months of failure.
- N25 Million-Naira turnover threshold as the basis for charging and remitting VAT.
- VAT is now remitted on Cash Basis
- Non-Resident Companies are now expected to register for VAT and also to include VAT on their invoices.
- The duty to self-charge or self-account for VAT is now an additional responsibility for taxpayers.
21st day following the month of transaction
Non-filing of returns
The Failure to file is N 50,000 for the first month of default then N 25,000 for the subsequent months in which the default continues.
Non-payment of taxes
Penalties at 10% and interest at the prevailing Market rate;
INPUT VAT claim on goods purchased for re-sale; furthering production processes; raw materials other than those of a capital nature.
Kindly click the link below to download the Value Added Tax Law