How do I add VAT to an exclusive price?

To add VAT to an exclusive net price, multiply the net price by (1 + VAT rate percentage / 100). For example, at a 15% VAT rate, multiply the net price by 1.15 to obtain the total gross price.

How do I remove or extract VAT from an inclusive total?

To extract VAT from an inclusive price, divide the total gross amount by (1 + VAT rate / 100) to find the net price, or multiply the total price by the statutory tax fraction [Rate / (100 + Rate)].

What is the difference between zero-rated and exempt VAT supplies?

Zero-rated supplies (0%) are taxable supplies charged at a 0% rate, allowing businesses to claim full input VAT refunds on related business purchases. Exempt supplies are not subject to VAT and do not permit input VAT deduction.

NIGERIA VAT & TAX CALCULATOR

Free VAT Calculator Nigeria

Calculate VAT-inclusive and VAT-exclusive amounts in seconds.

Calculation Mode

Quick Presets:

VAT / Tax Rate (%)

Statutory Standard Rates:

VAT Portion ()

Net Amount

VAT Charged

Gross Total

Applied Formula:

Tax Ratio:

Invoice Cost Distribution 100% Gross Total

Net Base ()

VAT Element ()

Tax Invoice Valuation Schedule

Official Computation

Net Amount (Exclusive of VAT)

VAT Amount ()

Total Gross Invoice Price (Inclusive of VAT)

VAT Calculator for Nigeria (7.5% Rate & Exempt Items)

In Nigeria, Value Added Tax (VAT) is governed by the Value Added Tax Act (Cap V1 LFN 2004 as amended by the Finance Acts 2019, 2020, and 2021) and administered by the Nigeria Revenue Service (NRS / FIRS). The standard VAT rate in Nigeria is 7.5% (increased from 5.0% under the Finance Act 2019).

Under Finance Act reforms, small companies with an annual gross turnover of less than ₦25,000,000 are exempt from registering for, charging, and collecting VAT on their taxable supplies. Medium (turnover between ₦25m and ₦100m) and large enterprises (turnover above ₦100m) must register, issue tax invoices, and file monthly VAT returns.

Nigeria FIRS VAT Mathematical Formulas

Standard formulas for computing 7.5% VAT and input tax recovery in Nigeria:

1. Adding 7.5% VAT (Exclusive Price)

Gross Price = Net Price * 1.075 | VAT = Net * 0.075

Applied when issuing commercial invoices in Nigeria to calculate the gross amount payable.

Appointed withholding VAT agents in Kenya (including government ministries, departments, and designated corporate agents) must withhold 2% of the taxable value on payments to suppliers and remit it directly to KRA via eTIMS, leaving the supplier with the remaining 14% VAT portion.

2. Extracting VAT (Tax Fraction)

VAT Amount = Gross Price * (7.5 / 107.5) | Net = Gross / 1.075

The statutory fraction of 7.5/107.5 (approx. 6.9767%) extracts the 7.5% VAT element from gross prices.

3. Allowable Input VAT Restriction

Allowable Input VAT = VAT on Goods for Resale or Raw Materials ONLY

Under Section 17 of the VAT Act, VAT on capital assets and overhead services CANNOT be offset against output VAT.

4. Net VAT Remittance to FIRS

Net Remittance = Output VAT - Allowable Input VAT - Withheld VAT (WHT)

Non-allowable input VAT on overheads and capital assets is expensed in profit & loss or capitalized.

Exempt Supplies Under the Nigerian VAT Act First Schedule

The Nigerian VAT Act grants broad statutory exemptions to protect essential living standards and agriculture:

Exempt Category	Statutory Scope	Examples
Basic Food Items	Unprocessed agro-food items for human consumption	Yams, cassava, rice, beans, fresh meat, poultry, fish, fruits, vegetables, culinary herbs, infant milk.
Medical & Health Products	Healthcare equipment and pharmaceuticals	Prescription drugs, vaccines, hospital services, medical equipment, locally manufactured sanitary towels.
Education & Books	Educational services and materials	Tuition fees, textbooks, laboratory equipment, educational publications.
Financial & Land Services	Specialized financial products	Interest on loans, microfinance banking services, transactions involving land and building purchases.

Nigeria Section 17 Input VAT Offset Restriction

Unlike many global jurisdictions, Nigeria imposes a restrictive input VAT mechanism under Section 17 of the VAT Act:

Allowable Input Tax: Only VAT paid on raw materials acquired for direct manufacturing, or inventory purchased directly for wholesale/retail resale, can be deducted against output VAT.
Overhead Expenses (Non-Deductible): VAT paid on legal services, rent, audit fees, utilities, and marketing must be expensed in the Statement of Profit or Loss.
Capital Assets (Non-Deductible): VAT paid on plant, machinery, motor vehicles, and office equipment must be capitalized as part of the asset cost for capital allowances.

Step-by-Step Worked Example: Commercial Supply in Lagos

Consider a Nigerian distributor invoicing a corporate customer for commercial electrical supplies worth ₦1,000,000 net base consideration.

Step 1: Compute 7.5% Output VAT

Net Taxable Value = ₦1,000,000. VAT at 7.5% (₦1,000,000 * 0.075) = ₦75,000. Total Gross Invoice = ₦1,075,000.

Step 2: Account for Withholding Taxes (WHT & VAT Withholding)

If the buyer is a government agency or oil & gas company, they withhold 100% of the VAT (₦75,000) plus 5% WHT (₦50,000) and issue FIRS credit notes.

Step 3: FIRS Form 002 Return Filing

The seller reports ₦1,000,000 gross sales and ₦75,000 output VAT on Form 002 via TaxPro Max, offsetting any qualifying inventory input VAT.

NRS / NRS / FIRS TaxPro-Max Filing & Designated VAT Withholding Agents

All VAT filings must be submitted digitally through the NRS / NRS / FIRS TaxPro-Max portal. Ministries, Departments, Agencies (MDAs), and upstream oil & gas operators are designated VAT withholding agents required to deduct VAT at source and remit directly to FIRS.

₦25 Million Small Business VAT Threshold

Under Section 15 of the VAT Act (as modified by Finance Act 2020), enterprises with annual turnover below ₦25 million are exempted from charging VAT. However, they must continue to pay VAT on taxable inputs, which is treated as an operational expense.

FIRS Monthly VAT Filing Deadlines & Non-Compliance Penalties

21st of Every Month: Mandatory statutory deadline for filing Form 002 returns on TaxPro Max and remitting net VAT to FIRS.
Late Filing Penalty: ₦50,000 for the first month of default, plus ₦25,000 for every subsequent month of failure to file.
Late Remittance Penalty: 10% penalty on the outstanding VAT amount, plus commercial bank lending interest rate.

Common Nigerian VAT Errors

Mistake: Claiming Input VAT on Office Rent or Machinery

Under Section 17, VAT on overheads and capital assets cannot be offset against output VAT; it must be expensed or capitalized.

Mistake: Using 7.5% Directly on Inclusive Prices

You must multiply inclusive prices by 7.5/107.5 (6.9767%) to correctly extract the VAT element.

Nigeria 7.5% VAT Ready Reckoner Table

Net Base Amount (NGN)	VAT at 7.5% (NGN)	Gross Invoice Total (NGN)	Tax Fraction (7.5/107.5)
₦50,000	₦3,750	₦53,750	6.98%
₦200,000	₦15,000	₦215,000	6.98%
₦1,000,000	₦75,000	₦1,075,000	6.98%
₦10,000,000	₦750,000	₦10,750,000	6.98%

Frequently Asked Questions: Nigeria VAT & FIRS

The standard Value Added Tax rate in Nigeria is 7.5%, established by the Finance Act 2019.

Yes. Businesses with an annual gross turnover below ₦25,000,000 are legally exempt from registering, charging, or filing monthly VAT on their sales.

Monthly VAT Form 002 returns must be filed and remittances paid through NRS / NRS / FIRS TaxPro-Max on or before the 21st day of the following month.

The FIRS exempts the following from VAT: basic food items (e.g., milk, garri, vegetables, fish, poultry), medical and pharmaceutical products, educational materials and tuition, baby products, agricultural equipment and vehicles, public transport services, and exported goods and services. Exemptions are strictly defined; always verify specific items with the FIRS or a tax consultant.

When a Nigerian business imports services from a non-resident supplier, the Nigerian recipient must self-assess and remit VAT to the FIRS at 7.5% of the contract value. This reverse charge applies even though the foreign supplier did not charge VAT. The business may be entitled to input VAT recovery on the self-assessed amount if it is used in making taxable supplies.

Executive Takeaways for Nigerian VAT Management

Correctly distinguish between allowable inventory input VAT and non-deductible overhead input VAT to avoid tax audit disallowances by FIRS. File all returns on TaxPro Max prior to the 21st monthly deadline to avoid automatic late filing penalties.

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Educational & Decision Support Disclaimer: This Nigeria VAT & Tax Calculator is provided for informational and decision support purposes only. While calculated in accordance with official Nigeria regulatory rules, statutory tax frameworks, and benchmark financial statistics, actual personal or commercial liabilities may vary based on individual contracts and bank charges.