Nigeria Sales Tax Rate – VAT

Updated on July 20, 2022

Nigerian VAT rates and VAT compliance

For the most part, the tax rate in Nigeria is 7.5% (raised from 5 percent on 1st Feburary 2020).

There are just a few supplies that are nil-rated, which means that any VAT paid by the customer can be reimbursed back to the customer.

The current exchange rates are as follows:

Nigeria VAT rates

Which products or services do you want to rate?
Percentage Standard:
goods and services that are subject to tax
There is 0%
Imports of commercial aircraft and spare parts, certain humanitarian initiatives, machinery and equipment used in the solid minerals sector, exports of agricultural equipment, commercial vehicles, basic foodstuffs, postal services, residential rentals, medical and pharmaceutical supply and supply materials, education and related materials, a limited range of financial services, and books and newspapers are all exempt from the zero-zero tax rate.

Nigerian VAT compliance

The following information must be included on VAT invoices:

The supplier’s name, address, and tax identification number
Tax identification number (TIN) of the customer’s address and contact information
Unique VAT number for the date of supply
Product or service description; VAT rate; amount charged; total invoice amount;
Under the VAT Act, there is no provision for credit notes, although they are accepted. A unique invoice number and a clear reference to the invoice being amended or reversed should be provided for each of these.

The tax authorities do not need electronic invoicing. There aren’t any provisions for a simplified bill of materials.

A penalty of 50% of the taxable value of the supply may be imposed if VAT invoices are not issued.

Time of supply rules

It is unclear how the Nigerian VAT Act relates to the timing of supply. Due dates for both an invoice and a payment are based on this general rule: the earliest of these two dates. During the importation process, the products are considered to have been sold and so subject to import VAT.