Value Added Tax (VAT) is a consumption tax levied on goods and services in Nigeria. It is administered by the Federal Inland Revenue Service (FIRS) and is currently set at 7.5%. Every business that meets the VAT registration threshold is required by law to register, charge, and remit VAT to the government.

This guide explains the VAT registration process, requirements, and compliance obligations for businesses in Nigeria.

Step 1: Determine Eligibility for VAT Registration

Businesses required to register for VAT include:

• Companies with an annual turnover of ₦25 million and above.
• Businesses involved in the supply of taxable goods and services.
• Importers of goods into Nigeria.
• Non-resident companies doing business in Nigeria.

Step 2: Gather Required Documents

To register for VAT, businesses must provide:

• Certificate of Incorporation (issued by the Corporate Affairs Commission – CAC).
• Tax Identification Number (TIN).
• Memorandum and Articles of Association (for companies).
• Business address and contact details.
• Valid means of identification of company directors.
• Evidence of business transactions (e.g., invoices, purchase receipts).

Step 3: Apply for VAT Registration

Online Application Process:

1. Visit the FIRS e-Tax portal at https://taxpromax.firs.gov.ng
2. Log in with your TIN and password (or create an account if you don’t have one).
3. Select VAT Registration and fill in the required details.
4. Upload the necessary documents.
5. Submit your application and wait for approval.

Physical Application Process:

1. Visit the nearest FIRS office with your registration documents.
2. Request and fill out the VAT registration form.
3. Submit the form along with the required documents.
4. FIRS officials will process the application and issue a VAT certificate.

Step 4: Receive Your VAT Certificate

Once approved, you will receive a VAT Certificate, which includes your VAT registration number. This number must be displayed on all invoices and receipts issued by your business.

Step 5: Begin VAT Collection and Remittance

• Charge 7.5% VAT on all taxable goods and services.
• Issue VAT-compliant invoices to customers.
• File VAT returns monthly, even if no transactions occurred.
• Remit collected VAT to FIRS on or before the 21st day of the following month.

VAT Filing and Compliance

• Businesses must submit VAT returns through the FIRS e-Tax portal or at FIRS offices.
• VAT records must be kept for a minimum of five years.
• Late filing or non-remittance attracts penalties.

Frequently Asked Questions (FAQs)

1. Who is exempt from VAT in Nigeria? Certain goods and services such as basic food items, educational materials, and medical services are exempt from VAT.
2. What happens if I don’t register for VAT? Failure to register for VAT within six months of commencing business attracts a penalty of ₦50,000 for the first month and ₦25,000 for each subsequent month of default.
3. Can a small business register for VAT voluntarily? Yes. Even if your turnover is below ₦25 million, you can voluntarily register for VAT to improve credibility and enable B2B transactions.
4. Can VAT be reclaimed on business expenses? Yes, businesses can claim input VAT on purchases related to taxable supplies, provided they have proper documentation.

VAT registration is a legal requirement for eligible businesses in Nigeria. Proper compliance ensures smooth operations, prevents penalties, and enhances business credibility. Businesses should keep accurate records, file VAT returns on time, and remit VAT to the government through FIRS.

For more details, visit the FIRS website at https://www.firs.gov.ng.