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Value Added Tax (VAT) is often the most frequent interaction an SME has with the tax authorities. In Nigeria, VAT is a multi-stage tax imposed on the supply of goods and services. As a business owner, you are essentially a voluntary tax collector for the government. If you sell a vatable item, you collect 7.5% from the buyer and remit it to the FIRS.
VAT Registration: The First Step
Before you can file, you must be registered. Every business is required to register for VAT within six months of commencement. Once registered, you will be expected to file returns every month, even if you had no transactions for that month (Nil returns). For more on initial setup, see VAT Registration in Nigeria: Requirements and Process.
Step-by-Step Guide to Filing VAT Online
Filing is now strictly done through the FIRS Taxpromax portal. Follow these steps:
- Step 1: Log in to the Taxpromax portal using your TIN and password.
- Step 2: Navigate to the ‘Taxes Due’ section and select ‘VAT’.
- Step 3: Input your total sales (Output VAT) and your total purchases from VAT-registered vendors (Input VAT).
- Step 4: The system will automatically calculate the difference. Generate a Remita Retrieval Reference (RRR).
- Step 5: Pay the amount via online banking or at any commercial bank.
To avoid mistakes, it is helpful to understand How to Calculate VAT in Nigeria properly before starting the online process.
Deadlines and Penalties
The deadline for VAT filing is the 21st day of the month following the transaction. For example, your January VAT must be filed by February 21st. Late filing attracts a fine of ₦50,000 for the first month and ₦25,000 for each subsequent month. These costs can add up quickly, so staying compliant is a financial necessity. For a full list of deadlines, refer to our VAT Returns Deadline in Nigeria guide.
For more technical assistance, you can view resources on Remita or the FIRS Help Desk. Practical example: If you sell furniture for ₦100,000, you must collect ₦107,500. The ₦7,500 is your VAT liability to be filed.
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