Value Added Tax (7.5% VAT) Calculator
Extracts and adds Nigerian VAT (7.5%), calculates VAT-inclusive and exclusive figures, and computes monthly FIRS Output vs Input VAT net remittable tax.
Computational Framework & Statutory Formulas
VAT = Amount × 7.5% | Inclusive Total = Amount × 1.075
Extracted VAT = Inclusive Amount × (7.5 / 107.5) ≈ Inclusive Amount × 0.069767
Net VAT Payable = Output VAT Charged - Qualifying Input VAT Paid
Nigerian Economic & Statutory Context
The standard VAT rate in Nigeria is 7.5% pursuant to the Finance Act 2020. Under Section 15 of the VAT Act, VAT returns must be filed and remitted to the FIRS on or before the 21st day of the month following the transaction. Input VAT is only claimable on goods that constitute stock-in-trade directly for resale or raw materials.
Frequently Asked Questions (FAQ)
How do you extract 7.5% VAT from an inclusive amount?
To extract 7.5% VAT from a gross amount, multiply the amount by 7.5 and divide by 107.5 (or multiply by approximately 0.069767). For example, on a ₦107,500 inclusive invoice, the VAT is exactly ₦7,500 and the net amount is ₦100,000.
Which transactions are exempt from Nigerian VAT?
Exempt items under the First Schedule to the VAT Act include basic food items, medical and pharmaceutical products, books and educational materials, baby products, locally produced fertilizer, and shared passenger transport services.
Can input VAT on administrative expenses or capital assets be offset against output VAT?
No. Under Section 17 of the Nigerian VAT Act, input VAT on overheads, services, and capital items cannot be claimed against output VAT; it must be expensed in the profit and loss account or capitalized as part of the asset cost.