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+# Value Added Tax (VAT) Guide - Nigeria 2026
+
+## Standard VAT Rate
+
+**The standard VAT rate in Nigeria is 7.5%** (effective since February 1, 2020, increased from the previous 5% rate under the Finance Act 2019).
+
+VAT is a consumption tax charged on the supply of goods and services in Nigeria. It applies to most goods and services unless specifically exempted or zero-rated.
+
+---
+
+## Who Must Register for VAT?
+
+### Mandatory Registration
+You **must** register for VAT if:
+- Your business supplies taxable goods or services in Nigeria
+- Your annual turnover exceeds **NGN 25 million**
+- You are an importer of goods or services
+
+### Exemption from VAT Registration
+You are **exempt** from VAT registration if:
+- Your business turnover is **NGN 25 million or less per year**
+- You are a **small company** (turnover ≤ NGN 100 million under NTA 2026)
+- You only supply exempt goods or services
+
+**Note:** Even if exempt, you may voluntarily register if you wish to claim input VAT credits.
+
+---
+
+## How to Register for VAT
+
+1. Obtain a Tax Identification Number (TIN) from FIRS
+2. Complete VAT registration form (FIRS Form 001)
+3. Submit to the nearest FIRS office with:
+   - Certificate of Incorporation (for companies)
+   - TIN certificate
+   - Completed application form on company letterhead
+4. FIRS issues a VAT registration certificate
+
+---
+
+## VAT Categories
+
+### Standard Rate (7.5%)
+Most goods and services are subject to the standard 7.5% VAT rate, including:
+- Retail goods
+- Professional services (legal, accounting, consulting)
+- Telecommunications services
+- Banking and financial services
+- Hotel and hospitality services
+- Construction services
+- Entertainment and media
+
+### Zero-Rated (0% VAT)
+These items are taxable but at 0%, allowing input VAT recovery:
+- **Basic food items** - raw and unprocessed foods
+- **Education services and materials** - books, educational equipment
+- **Pharmaceutical products** - medicines and medical supplies
+- **Agricultural inputs** - fertilizers, seeds, seedlings, animal feeds
+- **Exports** - goods and services exported outside Nigeria
+
+### Exempt from VAT
+No VAT is charged, and no input VAT can be recovered:
+- **Residential rent**
+- **Health and medical services**
+- **Land and buildings** (sale and rental)
+- **Shared passenger road transport** (non-charter public transportation)
+- **Humanitarian supplies**
+- **Baby products**
+- **Sanitary products** - towels, pads, tampons
+- **Disability aids** - wheelchairs, hearing aids, braille materials
+- **Electric vehicles and parts**
+
+### Suspended/Special Provisions
+- **Diesel and petrol** - VAT suspended
+- **Solar power equipment** - VAT suspended/exempt
+
+---
+
+## VAT Filing and Payment
+
+### Filing Frequency
+- VAT returns must be filed **monthly**
+- Due date: **21st day of the following month**
+
+### How to File
+1. **Online:** Via TaxProMax portal (https://taxpromax.firs.gov.ng)
+2. **Manual:** Submit completed VAT Form 002 to FIRS office
+
+### Payment Methods
+- Bank transfer
+- Electronic payment via designated banks
+- Payment through TaxProMax portal
+
+---
+
+## VAT Calculation
+
+### Basic Formula
+```
+VAT Amount = Taxable Value × 7.5%
+```
+
+### Example
+If you sell goods worth NGN 100,000:
+- VAT = NGN 100,000 × 7.5% = **NGN 7,500**
+- Total invoice = NGN 100,000 + NGN 7,500 = **NGN 107,500**
+
+### Input VAT vs Output VAT
+- **Output VAT:** VAT you charge on your sales
+- **Input VAT:** VAT you pay on business purchases
+- **VAT Payable = Output VAT - Input VAT**
+
+If Input VAT exceeds Output VAT, you may be entitled to a **VAT refund**.
+
+---
+
+## VAT Refunds
+
+You can claim VAT refunds on:
+- Assets or overheads used to produce VATable or zero-rated goods
+- Excess input VAT over output VAT
+
+**Process:**
+1. File a refund application with FIRS
+2. Provide supporting documentation (invoices, receipts)
+3. FIRS reviews and processes within 90 days
+
+---
+
+## Penalties for Non-Compliance
+
+| Offence | Penalty |
+|---------|---------|
+| Failure to register | NGN 50,000 first month, NGN 25,000 each subsequent month |
+| Late filing | NGN 50,000 first month, NGN 25,000 each subsequent month |
+| Failure to file | NGN 50,000 per month |
+| Late payment | 5% of unpaid amount per month (max 50%) |
+| False returns | 150% of tax understated plus prosecution |
+
+---
+
+## Key Points to Remember
+
+1. **Standard VAT rate is 7.5%** on most goods and services
+2. **Small companies** (≤ NGN 100 million turnover) are exempt from collecting VAT
+3. **File monthly** by the 21st of the following month
+4. **Keep records** for at least 6 years
+5. **Input VAT is recoverable** on purchases used for taxable supplies
+6. **Exports are zero-rated** - you can recover input VAT
+
+---
+
+## FAQs
+
+**Q: What is the current VAT rate in Nigeria?**
+The standard VAT rate in Nigeria is **7.5%**, effective since February 1, 2020.
+
+**Q: Do small businesses pay VAT?**
+Small companies with turnover of NGN 100 million or less are exempt from charging and remitting VAT under the Nigeria Tax Act 2026.
+
+**Q: Is rent subject to VAT?**
+Residential rent is **exempt** from VAT. Commercial/office rent may be subject to VAT depending on the lease arrangement.
+
+**Q: Are imported goods subject to VAT?**
+Yes, imported goods are subject to 7.5% VAT, payable at the point of importation.
+
+**Q: Can I claim back VAT paid on business purchases?**
+Yes, if you are VAT-registered and the purchases were used for making taxable supplies, you can claim input VAT as a credit against your output VAT.
+
+---
+
+*Last updated: January 2026*
+*Source: Nigeria Tax Act 2026, FIRS Guidelines*