Value Added Tax (VAT) in Nigeriaqeeva
VALUE ADDED TAX (VAT) IN NIGERIA
Value Added Tax (VAT) can be defined as an indirect tax that is imposed by the government on the supply of goods and services. It is the final consumer of a product or service that bears the burden of the payment of VAT. The Finance bill 2020 implemented the new tax rate for Value Added Tax (VAT) in Nigeria as 7.5%. The rate for VAT was previously 5% before this new amendment came. An illustration of this is Mr. A who sells bags for N15, 000 and the VAT that will be chargeable on each bag will be N1, 125, this means that Mr. A will sell the shoes to the customers at a price of N16, 125. Mr. A will retain the N15, 000 and remit the N1, 125 to the relevant tax authority which is the Federal Inland Revenue Service (FIRS).
Every VAT collected by every business owner must be remitted to the Federal In