Below are some of the frequently asked question about VAT by tax payers in Nigeria
1. QUE: What is Value-added tax?ANS: This is a tax levied on consumption of goods and services
2. QUE: On what types of goods and services is VAT paid?
ANS: All goods and services produced in or imported into Nigeria with the exception of certain goods and services specifically excluded by the Act ( VAT ACT CAP.VI LFN 2014) which are basic (raw) food items,baby products, medical services, and services rendered by community bank,etc.
3. QUE: What is the VAT rate?
ANS: 5%
4. QUE: What is the due date of filing VAT returns?
ANS: On or before the 21st day of the month succeeding the month of transaction.
5. QUE: What are the relevant documents in filing VAT returns?
ANS : a. Evidence of payment e.g. bank teller,e-ticket,e-acknowledgemen
b. Completed VAT returns form 002(for individuals, enterprises and companies)
c. Schedule of VAT collected indicating the name,tax payer identification number,TIN, of company or individual on whose transaction the VAT was charged and the corresponding amount.
6. QUE: Who should register for VAT?
ANS: Both individual and corporate bodies so long a they are trading in goods and services
7. QUE: How do you register for VAT collection?
ANS: Register with the closest FIRS office to your registered or business address by completing Tax Registration Input form, writing a VAT registration application letter and submitting copies of CAC and other documents and producing originals for sighting. After this you are automatically registered to collect VAT.
8. QUE: When should a taxable person register for VAT?
ANS; All taxable persons are expected to register for VAT collection immediately after registration with CAC (not later than 6 months) or at commencement of business, whichever comes first.
9. QUE: What are the penalties for non-registration for VAT?
ANS: A penalty of N10,000 for the first month in which the failure occurs and N5,000 for each subsequent month. If this persists, the business premises will be sealed off after a considered reasonable period.
10. QUE: What are the penalties for non-remittance of VAT?
ANS: A penalty of a sum equal to a 5% annum plus interest at a commercial rate payable within 30 days of notification by the tax authority.
11. QUE: How do you pay VAT?
ANS: VAT is paid through all FIRS designated revenue collecting banks
