Nigerian VAT Calculator (2026)
Add or remove Nigeria’s 7.5% VAT. No button — results update as you type.
Nigerian VAT Calculator
Nigeria’s Value Added Tax rate is 7.5% under the Nigeria Tax Act, 2025, effective 1 January 2026 — unchanged from the pre-reform rate, despite early drafts of the tax-reform bills proposing an increase to as high as 10-15%. This calculator adds VAT to a price you haven’t taxed yet, removes VAT from a price that already includes it, and — for anyone building an actual invoice — handles multiple line items with different VAT treatments (standard-rated, zero-rated, or exempt) in one place.
How the Math Works
Section 149 of the Nigeria Tax Act states the relationship directly: the VAT-exclusive value of a supply, plus the VAT chargeable on it, equals the VAT-inclusive consideration actually paid. In formula form:
- Adding VAT: VAT = net × 7.5%; gross = net + VAT (equivalently, gross = net × 1.075)
- Removing VAT: net = gross ÷ 1.075; VAT = gross − net
The two directions are exact inverses of each other — running a VAT-inclusive price back through “Remove VAT” reproduces the original VAT-exclusive figure to the naira, not an approximation.
Example Calculation
A supplier quotes ₦100,000 for a service, VAT-exclusive. VAT = ₦100,000 × 7.5% = ₦7,500. The customer’s invoice total is ₦107,500. Working backward from that same ₦107,500 invoice total: net = ₦107,500 ÷ 1.075 = ₦100,000, VAT = ₦7,500 — exactly reversible.
Exempt vs. Zero-Rated: Not the Same Thing
Both result in “no VAT added to the price” — which is exactly why they get confused constantly — but they’re legally different under Sections 186 and 187 of the Nigeria Tax Act. A zero-rated supply is still a taxable supply, just charged at 0%, so a business making zero-rated supplies can register for VAT and reclaim the input VAT it paid on its own purchases. An exempt supply sits outside the VAT system entirely — the business generally cannot reclaim input VAT tied to it. If you’re pricing goods or services, the distinction rarely changes your own price, but it materially affects a registered business’s VAT recovery position.
Exempt (Section 186) — no VAT, no input recovery
- Oil and gas exports; crude petroleum/feed gas
- Baby products; sanitary towels/pads/tampons (locally made)
- Shared passenger road-transport
- Agricultural equipment (tractors, ploughs, etc.)
- Land or building; money or securities
- Government licences
- Assistive/disability devices
- Military hardware/uniforms for security agencies
- Humanitarian donor-funded project goods
- Diplomatic mission supplies; free-zone approved supplies
Zero-rated (Section 187) — 0% VAT, input recovery allowed
- Basic food items
- Medical/pharmaceutical products & medical services/equipment
- Educational books/materials; tuition (all levels)
- Fertilisers, agrochemicals, veterinary medicine (locally produced)
- Live cattle, goats, sheep, poultry; seeds/seedlings
- Electricity (GENCO→grid, TCN→DISCO legs)
- Exported goods (excl. oil/gas), services & incorporeal property
- Electric vehicles and their assembly parts
What a Valid Nigerian VAT Invoice Must Show
Section 153 of the Nigeria Tax Act requires every taxable person to maintain sequential invoice numbering and to give the purchaser a VAT invoice containing: the supplier’s tax ID, an invoice number, the supplier’s name and address, the supplier’s incorporation/business registration number, the date of supply, the purchaser’s name, the gross amount of the transaction, and the VAT charged plus its rate. An invoice missing these fields isn’t just poor practice — it’s non-compliant with the Act’s own requirements, and a VAT invoice must be issued whether or not payment has actually been received yet.
This is exactly what the invoice builder above is designed to help with: line-by-line net, VAT, and gross amounts, with each line’s tax treatment stated explicitly, giving you the numbers a compliant invoice needs rather than a single opaque total.
Do Small Businesses Have to Charge VAT?
Not automatically. Under the Nigeria Tax Administration Act 2025, a small business — gross turnover of ₦50,000,000 or less per year, with fixed assets under ₦250,000,000 — is exempt from VAT registration, charging VAT on its supplies, and filing VAT returns, unless it chooses in writing to opt in. One exception: businesses providing professional services don’t qualify for this exemption regardless of turnover, per the Act’s own proviso.
Frequently Asked Questions
What is the VAT rate in Nigeria in 2026?
7.5%, unchanged by the Nigeria Tax Act 2025 despite early proposals to raise it to 10-15%.
What’s the difference between VAT-exempt and zero-rated?
Both mean no VAT is added, but a zero-rated supply is still taxable (at 0%), letting the seller reclaim input VAT — an exempt supply sits outside the VAT system, generally without input VAT recovery.
How do I remove VAT from a price that already includes it?
Divide by 1.075. A ₦107,500 VAT-inclusive price has a VAT-exclusive value of ₦100,000, with ₦7,500 of VAT.
Do small businesses have to charge VAT in Nigeria?
Not if turnover is ₦50,000,000 or less per year (and fixed assets under ₦250,000,000) — unless they opt in. Professional-services businesses are excluded from this exemption regardless of turnover.
This calculator applies the standard 7.5% VAT rate and the Section 186/187 exempt and zero-rated category lists from the Nigeria Tax Act, 2025. It does not model input/output VAT credit and refund mechanics, import VAT on non-resident digital supplies, or the 11th/13th Schedules’ fine print. Confirm exact treatment of a specific supply with the Nigeria Revenue Service or a qualified tax professional.
