Value added tax
The rate did not change. What changed is who has to register, and — the part worth money — how much of your input VAT you can get back.
Every figure on this page is read from the same configuration the calculators use — none of it is typed into the page. If a number here is wrong, the calculators are wrong too, and a changelog entry will record the correction.
Rate and thresholds
| 2026 new regime | 2025 old regime | |
|---|---|---|
| Standard rateUnchanged by the 2026 reform. Reports that the rate rose are wrong. | 7.5% | 7.5% |
| Small-business turnover capAt or below this, you are not required to register, charge or file. | ₦100,000,000 | ₦25,000,000 |
| Small-business fixed-asset cap | ₦250,000,000 | No test |
| Broad input-VAT recoveryWhether input VAT on services, overheads, fixed assets and capital expenditure is recoverable. | Yes | No |
| Refund claim window | 12 months | 12 months |
The rate stays at 7.5%. From 2026 input VAT recovery broadens to services, overheads, fixed assets and capital expenditure — these were not recoverable before. CONFLICT SMALL_CO_THRESHOLD applies to the ₦100m cap.
Registration and filing obligation began at ₦25m turnover. Input VAT on services, overheads and fixed assets was NOT recoverable before 2026 — only input VAT on goods that physically entered the product. If your accounting still blocks input VAT on rent, software or machinery, it is applying a rule that no longer exists.
Zero-rated vs exempt
Both mean your customer pays no VAT. They are opposites on your own costs, and that is the whole of the distinction. The guide works through what it costs to get wrong.
Zero-rated
You charge 0%. You can reclaim the input VAT on your costs.
Zero-rated supplies count as taxable supplies, so they protect your apportionment ratio for residual input VAT.
12 items
- Basic food itemsUnprocessed staples and basic foodstuffs. Prepared meals sold by restaurants, hotels and caterers are standard-rated.
- Medical and pharmaceutical products
- Educational books and materials
- Fertilisers, locally produced agricultural chemicals and veterinary medicine
- Farming machinery and farming transportation equipment
- Baby products
- Locally manufactured sanitary towels, pads and tampons
- Electricity generated by GenCos and supplied to the national grid or DisCos
- Exported goods (excluding oil and gas)Oil and gas exports are exempt, not zero-rated — the distinction changes input recovery.
- Exported services
- Exported incorporeal property
- Water (basic supply)Zero-rated as a basic item, BUT standard-rated when sold by restaurants, hotels and caterers. A frequent classification error.
Exempt
You charge nothing. You cannot reclaim the input VAT on your costs.
The 7.5% you paid your suppliers is gone — it becomes a cost of doing business. Exempt turnover also dilutes your apportionment ratio.
16 items
- Oil and gas exports
- Crude petroleum oils
- Petroleum products (PMS, AGO, LPG, CNG, kerosene)Commencement of the fossil-fuel surcharge on these products awaits regulation.
- Land and buildings, and any interest in land
- Money and securities
- Government licences
- Rent or lease of residential premises
- Shared passenger road-transport services
- Purchase, hire or lease of tractors, ploughs and agricultural equipment for agricultural purposes
- Goods and services for diplomatic missions
- Goods and services for humanitarian projects
- Military hardware, arms and ammunition supplied to the armed forces
- Life insurance and life assurance
- Assistive devices for persons with disabilities
- Electric vehicles and their parts
- Tuition for nursery, primary, secondary and tertiary education
Note the pair that catches people out: exported goods are zero-rated, but oil and gas exports are exempt. Same word, opposite input-VAT treatment.
Lists transcribed from the research report. Confirm each entry against the gazetted schedules before Phase 1 ships — the schedules were amended late in passage and secondary sources disagree on several items.
Tools that use these rates
- VAT calculator — add or extract 7.5%, and see what your classification costs.
- VAT return preparer — the return, and exactly which input VAT you can reclaim.
- Small-company threshold monitor — your headroom against both the VAT and income-tax caps.
Where these rates come from
- Nigeria Tax Act 2025, VAT provisions · Nigeria Tax Administration Act 2025 s.147 (small business) — verified 15 January 2026The rate stays at 7.5%. From 2026 input VAT recovery broadens to services, overheads, fixed assets and capital expenditure — these were not recoverable before. CONFLICT SMALL_CO_THRESHOLD applies to the ₦100m cap.
- Value Added Tax Act (as amended by Finance Act 2019) — verified 15 January 2026Registration and filing obligation began at ₦25m turnover. Input VAT on services, overheads and fixed assets was NOT recoverable before 2026 — only input VAT on goods that physically entered the product.
- Nigeria Tax Act 2025, zero-rated and exempt supplies schedules — verified 15 January 2026Lists transcribed from the research report. Confirm each entry against the gazetted schedules before Phase 1 ships — the schedules were amended late in passage and secondary sources disagree on several items.
A rate reference is not tax advice, and a rate on its own does not tell you your position. Read the disclaimer, and confirm anything load-bearing against the gazette before acting on it.