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How to Register for VAT in Nigeria in 2023

Value Added Tax (VAT) is a consumption tax levied on goods and services supplied in Nigeria and imported into Nigeria. It is currently charged at the rate of 7.5%. It can also be defined to be a tax on spending or consumption levied at every stage of transaction but eventually borne by the final consumer of such goods and services. 

How to Register for VAT in Nigeria

There are some goods in Nigeria, which are specifically exempted from paying VAT as contained in the first schedule of the VAT Act, and they include medical and pharmaceutical products; basic food items; books and educational material; newspapers and magazines; baby products; commercial vehicles and their spare parts; agricultural equipment and products; and veterinary medicine.

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In Nigeria, only taxable persons with taxable supplies of Twenty-Five Million Naira and above are required to charge, remit, collect the tax, and file monthly returns to FIRS. In essence, a vatable person who has not attained N25 Million threshold is exempted from VAT obligations and penalties. VAT is paid through all FIRS-designated revenue-collecting banks into the VAT Pool Account. Taxes are to be paid in the currency of the transaction.

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Who Should Register For Vat In Nigeria?

Both individual and corporate bodies so long as they are trading in goods and services. Businesses are expected to register for VAT within the first six months of the commencement of the business. Non-resident companies must register with the VAT office using the address of the person or business that is doing business within Nigeria. Correspondences related to VAT for this business will be sent to this address.

How To Register For VAT In Nigeria?

A VAT registration with FIRS is carried out by completing Form 001 at the FIRS office. The applicant must provide an application letter, incorporation documents, and utility bill. Upon being granted a VAT registration, a unique 10-digit VAT identification number will be provided to the tax payer to use on invoices or when submitting VAT returns.

How Much Is VAT Registration?

Registering for VAT is free.

Filing Of VAT Returns

The due date for the filing of VAT returns is on or before the 21st day of the month following the month of the transaction.

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What Is The Penalty For Not Registering For VAT in Nigeria?

A penalty of N10,000 for the first month in which the failure occurs and N5,000 for each subsequent month. If this persists, the business premises will be sealed up after a considered reasonable period.

Penalty for Non-Remittance of VAT

A penalty of a sum equal to 5% per annum plus interest at a commercial rate payable within 30 days of notification by the Tax Authority.

Penalty for Non-Deduction of VAT

Non-deduction or failure to collect tax by a taxable person attracts a penalty of 150% of the uncollected tax plus 5% interest above the CBN’s rediscount rate.

Is VAT Number the Same as TIN Number in Nigeria?

Yes. After applying for VAT registration, the VAT number you are provided with is your Tax Identification Number (TIN).

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Who Receives VAT in Nigeria?

Federal Inland Revenue Service (FIRS) is the agency responsible for assessing, collecting and accounting for tax and other revenues accruing to the Federal Government of Nigeria. Generally, each party in the chain of supply (manufacturer, wholesaler, and retailer) acts as a VAT collector. They collect VAT from their customer and include that VAT in their VAT return to the Federal Inland Revenue Service (FIRS) on or before the 21st day of the following month.  providers- MTN and Airtel; and money deposit banks, as VAT agents and mandates them to collect/withhold VAT on taxable supplies made to them.


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