VAT Calculator
This free VAT calculator helps to calculate amount payable as value added tax on a vatable good or service.
Value-added tax (VAT) also called goods and service tax (GST) is a consumption tax payable when you bought goods or when service is rendered to you. Currently, VAT is 7.5% in Nigeria, effective from February 1st, 2020 as decreed in Finance Act 2020.
VAT Amount = Product Amount * VAT Rate / 100
Gross Amount = Product Amount + VAT Amount
VAT is one of the finest instruments used by government to implement fiscal policies.
A little increase in VAT yields a large tax revenue, particularly for products that are necessities of life.
The more you buy, the more VAT you pay.
Hence, VAT is progressive and equitable.
Because VAT is collected indirectly, the taxpayers are not aware of the payment.
VAT is administered and collected by Federal Inland Revenue Service (FIRS).
Merchants collect the tax from consumers and remit to FIRS designated banks and then file returns.
The VAT returns filing must be done on the 21st of the month that follows the month of the purchase or sales.
Sharing of VAT Revenue among Tiers of Government
FIRS takes 4% of total VAT revenue collected.
The remaining 96% VAT revenue is shared among the tiers of government as tabulated below.
| Tier of Government |
Percentage |
|
Federal Government
|
15% of remaining 96% |
|
36 State Governments
|
50% of remaining 96% |
|
774 Local Governments
|
35% of remaining 96% |
|
FG gives 1% of its 15% to Federal Capital Territory (FCT - Abuja) Administration.
|