ng-vat-return

Nigeria VAT Return -- Self-Employed Skill v2.0

Verified rates & thresholds (accountant-reviewed)

Reviewed against the cited tax authorities by Omolola Fasasi on 2026-06-21. Items flagged for further clarification are tracked separately and excluded here. This block is generated from verified skill_facts — edit the facts, not the prose.

ng-vat-return

• Standard VAT rate — 7.5% (NIGERIAN TAX ACT 2025)
• Zero rate — exports, diplomatic supplies, humanitarian goods — 0% (VATA)
• Exempt supplies — basic food, medical, educational, agricultural, financial services, residential rent, public transport — Exempt (no VAT) (VATA First Schedule)
• Pre-2020 (superseded) VAT rate — no longer applicable — 5% (Finance Act 2020)
• VAT registration exemption threshold (annual turnover) — NGN 25,000,000 or less (NIGERIAN TAX ACT 2025)
• Filing frequency — Monthly (NIGERIAN TAX ACT 2025)
• VAT return filing deadline — 21st of the following month (NIGERIAN TAX ACT 2025)
• VAT payment deadline — Same as filing deadline — 21st of the following month (NIGERIAN TAX ACT 2025)
• Nil returns — required even with no transactions — Must be filed (NIGERIAN TAX ACT 2025)
• Filing portal — TaxPro Max (taxpromax.firs.gov.ng) (NIGERIAN TAX ACT 2025)
• Penalty — failure to register (first month) — NGN 50,000 (NIGERIAN TAX ACT 2025)
• Penalty — failure to register (each subsequent month) — NGN 25,000 per subsequent month (NIGERIAN TAX ACT 2025)
• Penalty — late filing (percentage) — A flat 10% per annum penalty is generally added to any unpaid or unremited tax amount (NIGERIAN TAX ACT 2025)
• Penalty — late filing (fixed) — NGN 50,000 for the first month and NGN 25,000 for every subsequent month (NIGERIAN TAX ACT 2025)
• Penalty — late payment (percentage) — 10% penalty on the unpaid tax amount, plus interest calculated at the prevailing CBN MPR. (NIGERIAN TAX ACT 2025)
• Penalty — late payment (interest rate) — CBN Monetary Policy Rate (MPR) (NIGERIAN TAX ACT 2025)
• Penalty — failure to issue VAT invoice — 50% of the cost of the goods or services for which the invoice was not issued (NIGERIAN TAX ACT 2025)
• Penalty — failure to collect VAT (surcharge) — 150% of the uncollected amount, (NIGERIAN TAX ACT 2025)
• Penalty — failure to collect VAT (interest) — 5% per annum above the Central Bank of Nigeria (CBN) Monetary Policy Rate (NIGERIAN TAX ACT 2025)
• VAT invoice retention period (minimum) — 6 years (NIGERIAN TAX ACT 2025)
• Output VAT formula — OUTPUT VAT = TAXABLE SALES × VAT RATE (NIGERIAN TAX ACT 2025)
• Net VAT formula — NET VAT = OUTPUT VAT - INPUT VAT (NIGERIAN TAX ACT 2025)
• Input VAT restriction — exempt supplies — Under the Nigeria Tax Act (NTA), you cannot recover or offset Input VAT incurred on purchases that directly relate to VAT-exempt supplies. Because you do not charge Output VAT on exempt sales, any Input VAT paid becomes a non-recoverable cost and should be expensed or capitalized. (NIGERIAN TAX ACT 2025)
• Input VAT claim — invoice requirement — Not claimable without a valid VAT invoice (NIGERIAN TAX ACT 2025)
• Input VAT apportionment method — residual (no direct attribution) — Taxable revenue / Total revenue x Total residual input VAT (NIGERIAN TAX ACT 2025)
• Default VAT rate when supply classification is unknown — 7.5% (standard-rated) (NIGERIAN TAX ACT 2025)
• Default for mixed supply apportionment — disputed portion — Under the Nigeria Tax Act (NTA), the default for mixed supply apportionment requires separating considerations based on market value or FIRS-approved methods. For disputed mixed supply portions, the taxpayer is advised to apportion using a fair and reasonable method, pending resolution. Taxpayers should pay output VAT on the non-disputed standard-rated portion to avoid penalties and interest (NIGERIAN TAX ACT 2025)
• VAT self-accounting rate — non-resident digital services not charged by supplier — 7.5% (NIGERIAN TAX ACT 2025)
• Exchange rate to use for VAT computation on foreign currency invoices — CBN exchange rate on the date of supply (NIGERIAN TAX ACT 2025)
• Primary legislation reference — Value Added Tax Act (VATA), Cap V1 LFN 2004, as amended by Finance Act 2020 (VATA Cap V1 LFN 2004)
• Supporting legislation — Finance Act 2021, Finance Act 2023; Nigerian tax act 2025
• Mandatory VAT invoice fields — Supplier name, TIN, description of goods/services, quantity, price exclusive of VAT, VAT amount, total, date, sequential number (VATA s 10)
• Bank interest classification — Exempt — not a taxable supply (VATA First Schedule)

Section 1 -- Quick Reference

Section 1 Quick Reference

Field	Value
Country	Nigeria (Federal Republic of Nigeria)
Tax	Value Added Tax (VAT) at 7.5%
Currency	NGN only
Primary legislation	Value Added Tax Act (VATA), Cap V1 LFN 2004, as amended by Finance Act 2020
Supporting legislation	Finance Act 2021, 2023; FIRS Regulations
Tax authority	Federal Inland Revenue Service (FIRS)
Filing portal	TaxPro Max (taxpromax.firs.gov.ng)
Filing frequency	Monthly
Filing deadline	21st of the following month
Contributor	Open Accountants Community
Validated by	Verified by Omolola Fasasi (MB058950) on 2026-06-21
Skill version	2.0

Rate Table

Rate Table

Rate	Application
7.5%	Standard rate on all taxable supplies (effective 1 February 2020)
0%	Exports, diplomatic supplies, humanitarian goods
Exempt	Basic food, medical, educational, agricultural, financial services, residential rent, public transport

Key Thresholds

Key Thresholds

Item	Amount
VAT registration exemption	Annual turnover NGN 25,000,000 or less (Finance Act 2020)
Filing frequency	Monthly for all registered persons
Nil returns	Required even with no transactions

Conservative Defaults

Conservative Defaults

Ambiguity	Default
Supply classification unknown	Standard-rated at 7.5%
Input VAT claim without invoice	Not claimable
Mixed supply apportionment unknown	No input credit on disputed portion
Non-resident service VAT	Self-account at 7.5%

Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable: Bank statement for the month in CSV, PDF, or pasted text, plus confirmation of VAT registration status and TIN.

Recommended: Sales invoices, purchase invoices with VAT shown, prior period returns.

Ideal: Complete invoice register, TIN certificate, WHT-VAT documentation (for government supplies).

Refusal Catalogue

• R-NG-1 -- Below threshold — Businesses with annual turnover of NGN 25,000,000 or less are exempt from VAT registration and filing. Stop.
• R-NG-2 -- International VAT recovery — Cross-border VAT recovery and transfer pricing implications are outside this skill scope. Escalate.
• R-NG-3 -- Corporate tax — Companies Income Tax (CIT) is a separate obligation outside this skill scope.

Section 3 -- Transaction Pattern Library

3.1 Income Patterns (Credits)

3.1 Income Patterns (Credits)

Pattern	Tax Line	Treatment	Notes
TRANSFER FROM [client] / INWARD TRF	Taxable supply	Output VAT at 7.5%	Standard client payment
POS SETTLEMENT / POS CREDIT	Taxable supply	Revenue	Point-of-sale terminal settlement
PAYSTACK PAYOUT / PAYSTACK SETTLEMENT	Taxable supply	Revenue	Paystack payment gateway
FLUTTERWAVE PAYOUT / RAVE SETTLEMENT	Taxable supply	Revenue	Flutterwave (Rave) settlement
OPAY SETTLEMENT / OPAY PAYOUT	Taxable supply	Revenue	OPay business payout
MONNIFY PAYOUT	Taxable supply	Revenue	Monnify settlement
INTERSWITCH / QUICKTELLER	Taxable supply	Revenue	Interswitch settlement
FGN / STATE GOVT / LGA PAYMENT	Taxable supply	Revenue with WHT-VAT	Government contract -- check withholding
INTEREST EARNED / INT CREDIT	Exempt	NOT taxable supply	Bank interest
LOAN DISBURSEMENT	EXCLUDE	Not income	Loan proceeds

3.2 Expense Patterns (Debits)

3.2 Expense Patterns (Debits)

Pattern	Expense Category	Treatment	Notes
OFFICE RENT / COMMERCIAL LEASE	Rent	Input VAT claimable at 7.5%	Dedicated business premises
IKEJA ELECTRIC / EKEDC / AEDC / BEDC	Utilities	Input VAT claimable	Electricity distribution companies
MTN / GLO / AIRTEL / 9MOBILE	Communications	Business portion input VAT	Mixed use: apportion
UBER / BOLT / TAXI	Travel	Input VAT if business	Keep receipts
GOOGLE ADS / META / LINKEDIN	Advertising	Input VAT claimable	Digital advertising
FIRS TAX PAYMENT / FIRS VAT	EXCLUDE	Tax payment	Not deductible
SALARY / PAYROLL	EXCLUDE	Not subject to VAT	Employment cost
PERSONAL WITHDRAWAL / SELF TRANSFER	EXCLUDE	Drawings	Not business

3.3 Exempt Supply Indicators

3.3 Exempt Supply Indicators

Pattern	Treatment	Notes
RICE / BEANS / GARRI / YAMS / VEGETABLES	Exempt	Basic food items
PHARMACY / HOSPITAL / CLINIC	Exempt	Medical and pharmaceutical
SCHOOL FEES / UNIVERSITY / COLLEGE	Exempt	Educational
RESIDENTIAL RENT / HOUSE RENT	Exempt	Residential accommodation

Section 4 -- Worked Examples

Example 1 -- Standard Monthly Return

Input: Taxable supplies NGN 5,000,000. Input VAT from purchases NGN 150,000.

Reasoning: Output VAT: 5,000,000 x 7.5% = NGN 375,000. Input VAT: NGN 150,000 (with valid VAT invoices). VAT payable: 375,000 - 150,000 = NGN 225,000.

Classification: VAT payable NGN 225,000.

Example 2 -- Exporter in Refund Position

Input: Zero-rated exports NGN 10,000,000. Input VAT NGN 300,000.

Reasoning: Output VAT: NGN 0 (zero-rated). Input VAT: NGN 300,000. Excess input: carry forward or claim refund from FIRS.

Classification: Refund/carry forward NGN 300,000.

Example 3 -- Mixed Supplies (Taxable and Exempt)

Input: Taxable supplies NGN 3,000,000, exempt supplies NGN 2,000,000. Total input VAT NGN 200,000 (none directly attributable).

Reasoning: Taxable ratio: 3,000,000 / 5,000,000 = 60%. Claimable input: 200,000 x 60% = NGN 120,000. Output VAT: 3,000,000 x 7.5% = NGN 225,000. VAT payable: 225,000 - 120,000 = NGN 105,000.

Classification: VAT payable NGN 105,000. Flag for reviewer on apportionment.

Example 4 -- Nil Return

Input: No supplies or purchases in the month.

Reasoning: Nil return must still be filed by the 21st. VAT payable = NGN 0.

Classification: File nil return.

Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 VAT Return Computation

5.1 VAT Return Computation

Step	Action
1	Total standard-rated output supplies (exclusive of VAT)
2	Output VAT = Standard-rated supplies x 7.5%
3	Total exempt supplies (reported, no VAT)
4	Total zero-rated supplies (reported, 0% VAT)
5	Total input VAT on purchases (from valid VAT invoices)
6	Input VAT restriction: no credit for input on exempt supplies
7	Net VAT = Output VAT - Allowable input VAT
8	VAT payable to FIRS

5.2 VAT Invoice Requirements (VATA s 10)

• VAT invoice requirements — Must show: supplier name, TIN, description of goods/services, quantity, price exclusive of VAT, VAT amount, total, date, sequential number. Retention: 5 years minimum. (VATA s 10)

5.3 Filing and Payment

5.3 Filing and Payment

Item	Detail
Filing frequency	Monthly
Filing deadline	21st of the following month
Payment deadline	Same as filing deadline
Filing method	TaxPro Max
Nil returns	Must be filed even if no transactions

5.4 Non-Resident Digital Services (VATA s 10A)

• Non-resident digital services — Non-resident suppliers of digital services to Nigerian consumers must register and charge VAT. If they do not, the Nigerian recipient may self-account. (VATA s 10A)

5.5 Penalties (VATA s 16-18)

5.5 Penalties (VATA s 16-18) (VATA s 16-18)

Offence	Penalty
Failure to register	NGN 50,000 first month + NGN 25,000 per subsequent month
Late filing	5% of tax due per month + NGN 50,000
Late payment	5% of amount due + interest at CBN MPR
Failure to issue VAT invoice	NGN 50,000 per offence
Failure to collect VAT	150% of uncollected amount + 5% interest per annum

Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Mixed Taxable and Exempt Supplies

• Mixed taxable and exempt supplies — When a business makes both taxable and exempt supplies, input VAT must be apportioned. Directly attributable input follows its supply; residual input is apportioned by revenue ratio. Flag for reviewer.

6.2 Non-Resident Services

• Non-resident services — If a non-resident does not charge VAT, the Nigerian recipient may need to self-account. Flag for reviewer when client purchases services from non-residents.

6.3 Foreign Currency Invoicing

• Foreign currency invoicing — VAT must be computed in NGN. Use CBN exchange rate on the date of supply. Flag for reviewer on exchange rate source and date.

6.4 WHT-VAT on Government Contracts

• WHT-VAT on government contracts — Government entities may withhold VAT at source. Verify withholding documentation.

Section 7 -- Working Paper Template

NIGERIA VAT WORKING PAPER
Taxpayer: _______________  TIN: ___________
Period: ___________  Month: ___________

A. OUTPUT (SALES)
  A1. Standard-rated supplies (excl. VAT)        ___________
  A2. Output VAT (A1 x 7.5%)                    ___________
  A3. Zero-rated supplies                        ___________
  A4. Exempt supplies                            ___________
  A5. Total supplies                             ___________

B. INPUT (PURCHASES)
  B1. Input VAT on taxable purchases             ___________
  B2. Less: input on exempt supplies             ___________
  B3. Net allowable input VAT                    ___________

C. NET VAT
  C1. VAT payable (A2 - B3)                     ___________
  C2. Or excess credit                           ___________

REVIEWER FLAGS:
  [ ] VAT registration confirmed?
  [ ] All input claims supported by valid VAT invoices?
  [ ] Mixed supply apportionment applied?
  [ ] Nil return filed if no activity?
  [ ] WHT-VAT from government contracts accounted for?

Section 8 -- Bank Statement Reading Guide

Nigerian Bank Statement Formats

Nigerian Bank Statement Formats

Bank	Format	Key Fields
GTBank	CSV / PDF	Date, Description, Debit, Credit, Balance
First Bank	CSV	Transaction Date, Narration, Debit, Credit, Balance
Access Bank	CSV	Date, Description, Debit Amount, Credit Amount, Balance
UBA	CSV	Date, Narration, Debit, Credit, Balance
Zenith Bank	CSV	Date, Description, Debit, Credit, Balance
Fidelity Bank	CSV	Trans Date, Narration, Debit, Credit, Balance

Key Nigerian Banking Narrations

Key Nigerian Banking Narrations

Narration	Meaning	Classification Hint
NIP / NIBSS / INWARD TRF	Interbank transfer in	Potential income
POS / SETTLEMENT	POS terminal	Income or expense
USSD / MOBILE BANKING	Mobile transfer	Income or expense
FGN / MDAs	Government payment	Income with WHT-VAT
STAMP DUTY	Stamp duty charge	Exclude
VAT / FIRS	Tax payment	Exclude
SMS ALERT	Bank charge	Exempt (financial service)

Section 9 -- Onboarding Fallback

If the client provides a bank statement but cannot answer onboarding questions immediately:

1. Classify all NIP/NIBSS credits from non-personal sources as potential taxable supplies
2. Apply 7.5% output VAT to all unclassified business income
3. Only claim input VAT where description clearly indicates business purchase
4. Flag all government payments for WHT-VAT review
5. Generate working paper with PENDING flags

Present these questions:

ONBOARDING QUESTIONS -- NIGERIA VAT
1. Are you registered for VAT with FIRS? What is your TIN?
2. What is your annual turnover (above or below NGN 25 million)?
3. What types of goods or services do you sell?
4. Do you make any exempt supplies (basic food, medical, education)?
5. Do you sell to government entities?
6. Do you import goods or services?
7. Do you have valid VAT invoices for all purchase claims?
8. Any excess credit carried forward from prior period?

Section 10 -- Reference Material

Key Legislation

Key Legislation

Topic	Reference
VAT imposition	VATA s 2
Registration threshold	VATA s 8 (Finance Act 2020)
Exempt supplies	VATA First Schedule
VAT invoice	VATA s 10
Non-resident digital services	VATA s 10A
Filing and payment	VATA s 15
Penalties	VATA s 16-18

Known Gaps / Out of Scope

• International VAT recovery
• Transfer pricing implications
• Companies Income Tax (CIT)
• Withholding tax on contracts (separate from VAT)

Changelog

Changelog

Version	Date	Change
2.0	April 2026	Full rewrite to v2.0 structure; Nigerian bank formats; local payment patterns (Paystack, Flutterwave, OPay); worked examples
1.0	2025	Initial version

Self-Check

• Registration and TIN confirmed?
• Turnover above NGN 25M threshold?
• All input claims supported by valid VAT invoices?
• Exempt supplies identified and excluded from output VAT?
• Nil return filed if no activity?
• Filing by 21st of following month?

PROHIBITIONS

• NEVER charge VAT on exempt supplies (basic food, medical, education, residential rent)
• NEVER claim input VAT without a valid VAT invoice
• NEVER require VAT registration for businesses below NGN 25,000,000 annual turnover
• NEVER apply a VAT rate other than 7.5% (the pre-2020 rate of 5% is no longer applicable)
• NEVER miss the 21st monthly filing deadline -- nil returns are still required
• NEVER claim input VAT on purchases used for exempt supplies
• NEVER ignore self-accounting obligations on imported services from non-residents
• NEVER present calculations as definitive -- always label as estimated and direct client to ICAN/ANAN member

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a chartered accountant (FCA/ACA) or accredited tax practitioner in Nigeria) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.