Value Added Tax (VAT) is a crucial part of doing business in Nigeria, yet many entrepreneurs struggle with compliance. At Faturoti Taiwo and Co., we help Lagos businesses navigate VAT regulations effortlessly. This guide breaks down everything small business owners need to know about VAT in Nigeria.

What is VAT in Nigeria?

VAT is a 7.5% consumption tax applied to goods and services at each production and distribution stage. The Federal Inland Revenue Service (FIRS) administers VAT, which affects:

✔ Goods produced or sold in Nigeria
✔ Services rendered within Nigeria
✔ Imported goods and services

Who Needs to Register for VAT?

You must register for VAT if your business:
✅ Has an annual turnover of ₦25 million or more
✅ Sells taxable goods/services (see exceptions below)
✅ Operates as a corporate entity or partnership

“Many small businesses don’t realize they’ve crossed the VAT threshold until FIRS contacts them. Proactive registration saves penalties.”
Faturoti Taiwo, Lead Consultant

VAT-Exempt Goods & Services

Not everything attracts VAT. Key exemptions include:

  • Basic food items (rice, beans, flour)
  • Medical and pharmaceutical products
  • Educational materials/books
  • Agricultural equipment
  • Exported goods/services

How VAT Works: Simple Example

  1. Supplier A sells materials to Manufacturer B for ₦100,000 + ₦7,500 VAT
  2. Manufacturer B charges ₦200,000 + ₦15,000 VAT to Retailer C
  3. Retailer C pays only ₦7,500 to FIRS (₦15,000 output VAT minus ₦7,500 input VAT)

VAT Compliance Requirements

Registered businesses must:
📌 File monthly VAT returns by the 21st of the following month
📌 Remit VAT collected to FIRS
📌 Keep proper records for 6 years
📌 Issue VAT invoices showing TIN

Common VAT Mistakes to Avoid

❌ Late filing (attracts penalties + interest)
❌ Underreporting sales (risks audits)
❌ Mixing exempt/non-exempt transactions
❌ Using unapproved invoicing formats

How Faturoti Taiwo and Co. Simplifies VAT for You

We help Lagos businesses:
🔹 Determine VAT registration requirements
🔹 Automate VAT calculations with cloud accounting
🔹 File accurate returns before deadlines
🔹 Claim input VAT refunds efficiently
🔹 Handle FIRS audits professionally

VAT FAQs for Small Businesses

Q: Can I register voluntarily if my turnover is below ₦25m?
A: Yes! Voluntary registration builds credibility with corporate clients.

Q: What’s the penalty for late VAT filing?
A: ₦50,000 for the first month + ₦25,000 for subsequent months.

Q: How do I handle VAT for e-commerce?
A: Digital products/services follow the same 7.5% VAT rule.

Take the Stress Out of VAT Compliance

Don’t let VAT complexities distract you from growing your business. Faturoti Taiwo and Co. provides:

✅ VAT registration assistance
✅ Monthly filing services
✅ FIRS dispute resolution
✅ Customized VAT training for your team

📞 Call today: (+234) 701-272-5021
📧 Email: thomas@faturotitaiwoandco.com
🌐 Visit: https://faturotitaiwoandco.com

Stay compliant, focused, and financially smart—let’s handle VAT together!

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