How to file VAT returns in Nigeria (2026)

VAT catches people out because it is not your money. You collect it from your customers on behalf of the government, and once a month you hand it over. Miss the date and you are fined whether or not you owed anything.

This is how it works in plain English, as the rules stand in 2026.

Do you have to charge VAT at all?

You must register for VAT and charge it once your business turns over ₦50 million a year or more. That line was ₦25 million until the new tax laws took effect in January 2026, so a lot of small businesses that used to be caught are now out of it.

Below ₦50 million you do not charge VAT on your invoices and you do not file VAT returns. Above it, you do both, every month.

If you are near the line, watch your rolling twelve-month turnover rather than your calendar year. You register when you cross it, not in January.

What you charge

VAT in Nigeria is 7.5%, and it has stayed at 7.5% under the new laws.

You add it to the price of what you sell. On an invoice it sits as its own line, so the customer can see what is goods and what is tax:

Goods	₦1,000,000.00
VAT at 7.5%	₦75,000.00
Total	₦1,075,000.00

That ₦75,000 is not income. It is money you are holding until the 21st of next month.

What you can take off

You do not hand over everything you collected. You take off the VAT you paid your own suppliers on things that went into what you sell. That is called input VAT, and what you remit is the difference:

VAT you charged customers − VAT you paid suppliers = what you send to the tax office

This is where 2026 changed something worth knowing. Input VAT used to be restricted largely to goods bought for resale or used in production. Now you can claim it on services and fixed assets too, as long as they relate to what you sell with VAT on it. For a consultancy, an agency or a services business that previously could claim almost nothing, this is real money.

Two things to keep in mind:

• You need a proper VAT invoice from the supplier with their TIN on it. No invoice, no claim.
• If what you sell is exempt, you cannot claim the input VAT on it.

What is not charged at 7.5%

Some things carry no VAT. The main ones are:

• Basic food items
• Medical and pharmaceutical products, medical equipment and services
• Educational books and materials, and tuition fees
• Electricity generation and transmission
• Exports, other than oil and gas

The distinction that matters here is between zero-rated and exempt. On zero-rated supplies you charge nothing but you can still claim back the input VAT you paid. On exempt supplies you charge nothing and you cannot claim it. If a good part of what you sell falls into these lists, it is worth asking your accountant which side of that line you are on, because it changes what you can recover.

When it is due

The 21st of the following month. January's VAT is due on 21 February, February's on 21 March, and so on.

The same date covers both jobs: filing the return and paying the money. People sometimes file on time and pay late, and are surprised to find that is still a default.

File every month even in a month when you sold nothing. A nil return is still a return, and the penalty for not filing applies whether or not you owed anything.

What it costs to be late

Two separate things go wrong, and they stack.

Not filing the return:

• ₦50,000 for the first month you are late
• ₦25,000 for each month after that

Not paying the money over: a penalty on the amount outstanding plus interest at a commercial rate, which moves with the Central Bank's rate.

So a business that forgets VAT for six months is not facing one fine. It is facing a filing penalty that has been climbing every month, a penalty on the tax itself, and interest running on top. This is the single most common way a small Nigerian business ends up with a tax bill it cannot pay, and it almost always starts with a month that simply got missed.

How to file

1. Work out the figure. All the VAT you charged in the month, minus the input VAT you can claim, from your own records.
2. Log in to the tax office's filing portal with your TIN.
3. Fill in the return for the month, with your output VAT, your input VAT and the net amount.
4. Pay what the return says, by transfer or through the portal.
5. Keep the receipt. You will need it if a figure is ever queried, and you will need your invoices and your suppliers' invoices to back up both sides.

What changed in 2026

The four tax Acts signed in June 2025 took effect in January 2026. For VAT the changes that matter to an ordinary business are:

• The registration threshold went up from ₦25 million to ₦50 million
• Input VAT can now be claimed on services and fixed assets
• The list of zero-rated items was widened, particularly around food, health and education
• Electronic invoicing is being brought in, with invoices reported to the tax authority rather than just issued to the customer. Which year that reaches you depends on your turnover, and our guide to Nigeria's e-invoicing rules sets out the dates

The rate itself did not move. It is still 7.5%.

VAT is not the only deduction

If you pay suppliers, you are probably also meant to be deducting withholding tax from what you pay them, and that lands on the same 21st of the month. The two get muddled constantly, not least because WHT is worked out on the amount before VAT. Our guide to withholding tax in Nigeria goes through the rates and the arithmetic.

Keeping it simple

Most of the pain in VAT is not the rules. It is getting to the 20th of the month and having to reconstruct what you charged and what you paid from a drawer of paper.

If your invoices and your bills are recorded as they happen, with the VAT on each one, the monthly figure is already there. That is what accounting software is for, and it is what MyBooks does with VAT: 7.5% goes on invoices and bills as you raise them, and your monthly return is laid out as Form 002 from those records rather than worked out again from scratch.

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This guide is general information about Nigerian VAT, not tax advice for your own business. Rates, thresholds and penalties change. Confirm anything you are going to act on with the Nigeria Revenue Service or your accountant, and check the date at the top of this page to see when it was last reviewed.