VAT on invoices in Nigeria: how to show it
Value Added Tax (VAT) is a tax added to the price of many goods and services. Whether you must charge it depends on your business. If you do, it should appear clearly on the invoice. Here are the basics.
The key point first
What VAT is
VAT is a consumption tax. A VAT-registered business adds it to what it sells, collects it from the customer, and pays it over to the tax authority. The standard rate in Nigeria has been 7.5%. Check the current rate and exemptions for your goods or services before you rely on this.
How to show VAT on an invoice
- List your items and the subtotal before VAT.
- Add a separate line: VAT (7.5%) with the amount.
- Show the total including VAT as the amount due.
- If you are VAT-registered, put your TIN or VAT number on the invoice.
A worked example
| Description | Amount |
|---|---|
| Brand design service | ₦200,000.00 |
| Subtotal | ₦200,000.00 |
| VAT (7.5%) | ₦15,000.00 |
| Total due | ₦215,000.00 |
To get VAT: multiply the subtotal by 0.075. Here, 200,000 × 0.075 = 15,000. This is a sample calculation only, not tax advice.
Prices with VAT already included
If your price already includes VAT, say so ("VAT inclusive") so the customer does not think it will be added later. To find the VAT inside a total, divide the total by 1.075 to get the price before VAT, then subtract.
Keep it simple with software
Adding VAT by hand invites mistakes. In Aurum, you switch VAT on for an invoice and it adds the line and total correctly.
Questions people ask
What is the VAT rate in Nigeria?
It has been 7.5%. Check the current rate and any exemptions with the tax authority or an accountant, as rules can change.
Do small businesses have to charge VAT?
It depends on your business and turnover, and the rules changed with the 2025 tax reforms. Ask an accountant.
Should VAT appear as its own line?
Yes, if you charge it. Showing it separately makes the invoice clear and easier to account for.
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