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.

Enabling laws

Value Added Tax Act Cap V1, LFN 2004, as amended to date.

Recent Amendments –

  1. Increase of VAT rate from 5% to 7.5% (from 1st February 2020)
  2. 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.
  3. N25 Million-Naira turnover threshold as the basis for charging and remitting VAT.
  4. VAT is now remitted on Cash Basis
  5. Non-Resident Companies are now expected to register for VAT and also to include VAT on their invoices.
  6. The duty to self-charge or self-account for VAT is now an additional responsibility for taxpayers.

Filing obligations

21st day following the month of transaction

Associated Penalties
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;

Available Reliefs

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

DOWNLOAD VAT LAW

SIAO VAT CALCULATOR

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