Financial Q&A: Your Questions Answered
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What goods and services are VAT-exempt?
Under the Nigeria Tax Act 2025 (the landmark legislation active in 2026), the government has significantly expanded the list of VAT-exempt and zero-rated items to lower the cost of living and support key industries. The law distinguishes between "Exempt" (completely outside the VAT net) and "Zero-Rated" (0% tax, but allows businesses to claim refunds on their costs). For you as a consumer or small business, both effectively mean 0% VAT at the point of sale.
How do I calculate withholding tax on consultant fees?
To calculate Withholding Tax (WHT) on consultant fees in Nigeria, you must first identify if the consultant is a Resident or Non-Resident. Under the Deduction of Tax at Source (Withholding) Regulations 2024 (effective 2025/2026).
What is the deadline for remitting withholding tax and the penalties?
The Timeline for remitting the deducted tax to the NRS is by the 21st day of the following month. Under the Nigeria Tax Administration Act 2025 and the Deduction of Tax at Source (Withholding) Regulations 2024 (now effective in 2026), the rules and penalties have been sharpened to enforce digital compliance.
How do I register for VAT?
In 2026, the process for VAT registration in Nigeria is governed by the Nigeria Tax Administration Act 2025. The biggest change is that registration is now largely automatic through a "One-Number" system. Here is exactly how you register depending on your business type:
Do I need to register for VAT as a small business in Nigeria?
Under the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 (both effective as of January 1, 2026), the rules for VAT registration have been simplified to favor micro and small businesses. The short answer is: If your annual turnover is ₦50 million or less, you are not required to register for, charge, or remit VAT. Here is the breakdown of the new rules for 2026: