Readers ask: What Is Vat In Nigeria?

How much is VAT in Nigeria?

Nigeria VAT rates
Rate Type
7.5% Standard
0% Zero

How is VAT calculated in Nigeria?

VAT is calculated at a flat rate of 7.5% on all goods and services sold in Nigeria; this is stipulated under section 4 of the VAT Act, except items that are on the VAT exempt list or zero-rated. An example of such is exported goods, all exported goods are zero-rated, that is such goods are VAT -able but at zero percent.

What is the current VAT rate in Nigeria 2020?

The rate of value added tax ( VAT ) in Nigeria increased from 5% to 7.5%. The Finance Act, 2019, signed by the president and effective on 13 January 2020, included the VAT rate change.

What is VAT and how it works?

VAT stands for Value Added Tax and is a general tax placed on almost all goods and services sold. The simple principle behind VAT is consumers pay a tax on the products they buy based on the value of the product. VAT rates are percentage based, which means the greater the price, the more the consumer pays.

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How is the VAT calculated?

VAT -inclusive prices To work out a price including the standard rate of VAT (20%), multiply the price excluding VAT by 1.2. To work out a price including the reduced rate of VAT (5%), multiply the price excluding VAT by 1.05.

What is the VAT rate 2020?

This cut in the VAT rate from the standard rate of 20% will have effect from 15 July 2020 to 31 March 2021. These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.

What services are VAT exempt in Nigeria?

2020 LIST OF GOODS AND SERVICES EXEMPTED FROM VALUE ADDED TAX IN NIGERIA

  • all medical and pharmaceutical products;
  • basic food items;
  • books and educational materials including educational performances and tuition from nursey to tertiary education;
  • baby products;
  • all exported goods and services;

How much is the VAT now?

What are the current VAT rates in the UK? The standard rate of VAT in the UK is currently 20% and this is the rate charged on most purchases. However, there are other VAT rates which you need to be aware of as a business.

Who introduced VAT in Nigeria?

Emmanuel Ijewere to conduct extensive research and make recommendations. VAT was-finally introduced in Nigeria in 1993 by the VAT Act No. 102 of 1993 as a replacement of the sales tax which had been in operation under Federal government Legislated decree No.

Is VAT chargeable on rent in Nigeria?

For VAT to be chargeable, the transaction must qualify as a supply of goods or service. Rent derived from lease of real properties, whether for residential or commercial purposes, is not a supply of goods or services and is therefore not liable to VAT.

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What percentage is VAT?

Philippines. The current VAT rate in the Philippines stands at 12%. Like in most other countries, the amount of taxes is included in the final sales price. Senior citizens are however exempted from paying VAT for most goods and some services that are for their personal consumption.

Is fuel in Nigeria VATable?

VAT accounts for about 20% of the total tax revenue generated in the country. Industry practice appears to be not to charge VAT. However, FIRS has not accepted this practice on the basis that refined petroleum products are not on list of items expressly exempted from value added tax ( VAT) in Nigeria.

What is VAT example?

Value Added Tax ( VAT ), also known as Goods and Services Tax (GST) in Canada, is a consumption tax that is assessed on products at each stage of the production process – from labor and raw materials to the sale of the final product. For example, if there is a 20% VAT on a product that costs $10, the consumer.

How do you avoid VAT?

Avoid paying VAT – the legal way

  1. Make your own sandwiches. You don’t pay VAT on most food stuffs, especially basic ingredients such as bread, salad, fruit and cheese.
  2. Buy biscuits carefully.
  3. Give books as presents.
  4. Don’t buy drinks on the go.
  5. Holiday overseas.
  6. Make your own smoothies.
  7. Buy kids clothes.
  8. Buy from overseas sites.

Who pays VAT buyer or seller?

The seller, while selling a product (which is a Finished Good for him) charges VAT from the buyer at the specified rate given in the respective State VAT Act, which he pays to the respective State Government. The buyer, if he is a final consumer comsumes the good and ends up paying the amount of VAT.

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