- VAT is a consumption tax levied at 5% on the supply of goods and services.
- You can claim VAT by deducting your Input Vat from your Output Vat
- If you are registered for VAT you must levy 5% Vat on all goods and services excepZ
- Zero rated items are liable to VAT but at 0%
- Exempt goods are not liable to VAT
There are relatively two methods of administering VAT. These include the suspension scheme and the credit mechanism. The suspension scheme ensures that the taxes are deferred until the final consumption stage for instance, the Retail Sales Tax system in the US. However, the credit mechanism allows input taxes paid at the intermediate stages of the production of goods to be set off against the output tax. This in effect still allows for the VAT to be borne by the final consumer.
In Nigeria, VAT is administered via the credit mechanism. The law allows for you to claim VAT paid on the purchase of goods for resale (Input VAT) from the VAT charged at the point of resale (Output VAT). That is, your net VAT payable is your Output VAT less your Input VAT. However, this claim is only valid for goods. Input VAT incurred on services is not claimable against your Output VAT but should be posted into the profit or loss account as an expense.
If you’re registered for VAT, you have to charge VAT at 5% on all goods and services you supply, unless they fall into one of these categories:
- exempt from VAT
Zero-rate of VAT
There are certain goods and services that are zero-rated. This means that they are liable to VAT, but the VAT rate is zero per cent. If you sell zero-rated goods, you can generally reclaim Input VAT on any purchases that relate to those sales. In Nigeria, these items were recently reintroduced into the VAT Act.
- Non-oil exports
- Goods and services purchased by diplomats
- Goods purchased for use in humanitarian donor-funded projects
Sellers are to charge VAT on the sale of these goods at 0%. As a result, there is no Output Vat from which you can reclaim the Input VAT incurred at the point of purchase. This may result in additional tax cost to the business. However, the Nigerian tax laws allow you to claim a refund or credit for the Input VAT.
VAT Refund Mechanism
The Nigerian tax laws provide a mechanism for claiming VAT refunds. The eligibility to claim VAT refunds arises where the Input VAT genuinely exceeds the Output tax for a transaction period. For a supplier of Zero-rated goods, the Input VAT would always exceed the Output VAT as the Output VAT is zero. There are three methods of refund available to Nigerian business owners. They include, the credit method, the direct cash refund method and the final method is a combination of both.
This is carried out with the use of VAT form 002 (VAT Self-assessment Form) which contains the calculation of total Output VAT and Input VAT. On this form the supplier of Zero-rated goods discloses the Output VAT of zero and Input VAT incurred. This method allows you to offset the credit balance of Input VAT against any subsequent Output VAT chargeable. This is a popular VAT refund approach and is encouraged by the Nigerian tax authorities. However, it will only apply where the supplier of Zero-rated goods also supplies other goods on which VAT is applicable at the standard rate. Where this is not the case, the direct-cash method is preferable.
Direct Cash Method
Under this method, an application is made to the FIRS stating the excess of Input VAT over Output VAT. This application is made along with the relevant supporting documents.
All claims for refund, irrespective of the mode of refund, are subject to verification by the tax authorities. It is therefore important for all supporting documents to be maintained. Some of such documents include,
- Monthly VAT return form 002 (a VATable entity is required to file monthly VAT returns stating it VAT status, whether or not VAT is payable);
- Input VAT invoices and sales invoices;
- Notices of import and original proof of tax payment on imports;
- Export documents, notices of export and proof of realization of export; and
- Any other relevant document needed to back up refund claim.
The audit is carried to confirm the amount up for claim by the taxpayer. The direct cash refund method is the method mostly prone to audit by the tax authorities. It is important to state at this point that this audit usually delays the refund process. Therefore, it is preferable to use the credit approach as you are able to personally administer the refund and there may not be a cause for audit by the tax authorities. Input VAT claim via the credit method becomes subject to audit by the tax authorities where the Input VAT amount has accumulated overtime and the company intends to offset the amounts against its current Output VAT.
Zero-rated goods and Exempt goods.
Many tax payers fail to distinguish between Zero-rated goods and Exempt goods. Exempt goods are not liable to VAT, so if you supply them, then:
- you don’t charge any VAT on them;
- you don’t include them in your VAT accounts; and
- you can’t normally reclaim VAT paid on purchase of inputs.
Therefore the major distinction between Zero-rated goods and Exempt goods is the ability to reclaim Input VAT incurred.
VAT exempt items are specifically listed in the Act and are primarily essentials. Some of which include:
- All medical and pharmaceutical products
- Basic foods items
- Books and educational materials
- Baby products
If you sell a combination of exempt goods and goods that are liable to VAT (whether at 5% or 0%), your business is ‘partly exempt’ and you will only be able to reclaim Input VAT related to the VAT incurred on the taxable goods.
COVID-19 Update in Nigeria
On the 4th of July 2020, 603 new confirmed cases and 6 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 28,167.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria touched a new milestone as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 28,167 confirmed cases.
On the 4th of July 2020, 603 new confirmed cases and 6 deaths were recorded in Nigeria, having carried out a total daily test of 3,355 samples across the country.
To date, 28,167 cases have been confirmed, 11,462 cases have been discharged and 632 deaths have been recorded in 35 states and the Federal Capital Territory. A total of 148,188 tests have been carried out as of July 4th, 2020 compared to 144,833 tests a day earlier.
COVID-19 Case Updates- 4th July 2020
- Total Number of Cases – 28,167
- Total Number Discharged – 11,462
- Total Deaths – 634
- Total Tests Carried out – 148,188
According to the NCDC, the 603 new cases were reported from 19 states- Lagos (135), Edo (87), Abuja (73), Rivers (67), Delta (62), Ogun (47), Kaduna (20), Plateau (19), Osun (17), Ondo (16), Enugu and Oyo (15), Borno (13), Niger (6), Nasarawa (4), Kebbi (3), Kano (2), Sokoto and Abia (1) case each
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 11,045, followed by Abuja (2,153), Oyo (1,466), Edo (1,353), Kano (1,264), Delta (1,227) Rivers (1,181), Ogun (974), Kaduna (855), Katsina (579), Borno (528), Bauchi (516), Gombe (513), Ebonyi (438), Plateau (421), Ondo (410), Abia (383), Enugu (372), Imo (352), Jigawa (318).
Kwara state has recorded 269 cases, Bayelsa (234), Nasarawa (225), Osun (165), Sokoto (153), Niger (122), Akwa Ibom (104), Benue (97), Adamawa (89), Kebbi (84), Zamfara (76), Anambra (73), Yobe (61), Ekiti (43), Taraba (19), while Kogi state has recorded 5 cases.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|July 4, 2020||28167||603||634||6||11462||16071||7|
|July 3, 2020||27564||454||628||12||11069||15867||7|
|July 2, 2020||27110||626||616||13||10801||15693||7|
|July 1, 2020||26484||790||603||13||10152||15729||7|
|June 30, 2020||25694||561||590||17||9746||15358||7|
|June 29, 2020||25133||566||573||8||9402||15158||7|
|June 28, 2020||24867||490||565||7||9007||14995||7|
|June 27, 2020||24077||779||558||4||8625||14894||7|
|June 26, 2020||23298||684||554||5||8253||14491||7|
|June 25, 2020||22614||594||549||7||7822||14243||7|
|June 24, 2020||22020||649||542||9||7613||13865||7|
|June 23, 2020||21371||452||533||8||7338||13500||7|
|June 22, 2020||20919||675||525||7||7109||13285||7|
|June 21, 2020||20242||436||518||12||6879||12847||7|
|June 20, 2020||19808||661||506||19||6718||12584||7|
|June 19, 2020||19147||667||487||12||6581||12079||7|
|June 18, 2020||18480||745||475||6||6307||11698||7|
|June 17, 2020||17735||587||469||14||5967||11299||7|
|June 16, 2020||17148||490||455||31||5623||11070||7|
|June 15, 2020||16658||573||424||4||5349||10885||7|
|June 14, 2020||16085||403||420||13||5220||10445||7|
|June 13, 2020||15682||501||407||8||5101||10174||7|
|June 12, 2020||15181||627||399||12||4891||9891||7|
|June 11, 2020||14554||681||387||5||4494||9673||7|
|June 10, 2020||13873||409||382||17||4351||9140||7|
|June 9, 2020||13464||663||365||4||4206||8893||7|
|June 8, 2020||12801||315||361||7||4040||8400||7|
|June 7, 2020||12486||260||354||12||3959||8173||7|
|June 6, 2020||12233||389||342||9||3826||8065||7|
|June 5, 2020||11844||328||333||10||3696||7815||7|
|June 4, 2020||11516||350||323||8||3535||7646||7|
|June 3, 2020||11166||348||315||1||3329||7522||7|
|June 2, 2020||10819||241||314||15||3239||7266||7|
|June 1, 2020||10578||416||299||12||3122||7157||9|
|May 31, 2020||10162||307||287||14||3007||6868||7|
|May 30, 2020||9855||553||273||12||2856||6726||7|
|May 29, 2020||9302||387||261||2||2697||6344||7|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|
Over 20% of N-Power beneficiaries are now business owners – FG
The Minister emphasized the President’s vision of lifting 100 million Nigerians out of poverty.
The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, has said that about 109,823 beneficiaries of the N-Power programme now have their own businesses.
This represents about 22% of the 500,000 Nigerians that have benefited from this programme since its inception.
This was disclosed in a statement by the Minister’s Special Assistant on Strategic Communications, Mrs Halima Oyelade on Saturday, July 4, 2020. She said that the beneficiaries of Batch A and B of N-Power have established businesses in their communities.
The Minister in the statement said, “Statistics like this gives me joy and once again, I want to say congratulations; I look forward to hearing amazing testimonies and meeting beneficiaries of this programme who will be doing great things in the future”.
She emphasized President Muhammadu Buhari’s vision of lifting 100 million Nigerians out of poverty in the next 10 years by creating opportunities that would improve the productivity of Nigerian youths for entrepreneurship or employment.
Going further the minister said, “Thus, the need to find ways to engage them is of utmost importance. However, the commencement of the enrolment of Batch C was predicated on the need to give more Nigerian youths the opportunity to benefit. This is because, keeping only 500,000 beneficiaries for four years defeats the purpose of Mr President’s vision, hence the need to scale up and was in no way meant to be punitive.”
While acknowledging the beneficiaries’ contributions, Farouq said, ‘’You are our model N-Power beneficiaries. Please avail yourselves of all opportunities provided by government like interest-free loans and leverage on those opportunities while using N-Power as a stepping stone”.
The minister said the ministry is working at resolving some of the challenges facing the programme which include delays in the payment of stipends, beneficiaries not showing up at their places of primary assignments and people accessing the programme while gainfully employed elsewhere.
The minister also assured beneficiaries that outstanding payments would be made and transition plans were ongoing and would be duly communicated to them on their platform.
Some of the beneficiaries of the programme gave good testimonies about the impact of the programme in their lives and all expressed their gratitude to the Federal Government for the opportunity.
Nairametrics has reported the opening of application portal for batch C of the programme with effect from 11.45 pm on June 26, 2020. There have been over 3 million applicants that have shown interest in batch C of the programme in about a week.
Meristem features Nike Okundaye in Campaign titled “The Journey”, highlights the importance for partners
Meristem taps into Okundaye’s creative energy, highlighting the shared story of growth and collaboration.
It has been a long journey for financial services provider, Meristem Nigeria, having started out as a boutique stockbroking firm over 16 years ago and morphing into a capital market conglomerate offering an array of diversified service and product offerings. The tale is similar for the art and culture doyen, Nike Okundaye-Davies whose humble beginning in traditional weaving and dying practice annealed her to the art world and art lovers.
At a graceful age of 70, she has achieved over 102 solo art exhibitions, 36 group art exhibitions, a permanent display of two of her works in the Smithsonian National Museum of African Art, a Harvard recognition and many other global acclaims. With four (4) art galleries spread across the country, and the Lagos center being the biggest art gallery in West Africa, she once told a Forbes journalist that her dreams are driven by careful financial planning as she reinvests at least two-thirds of her income in her business and art centers.
Meristem taps into her creative energy in this campaign, highlighting the shared story of growth and collaboration for both institutions, and the need to onboard the right partners to achieve long term financial goals and investment security.
Meristem, a capital market conglomerate and diversified financial services provider offering stockbroking, wealth management, asset management, trustee services and financial advisory. Over the past 16 years, Meristem has been consistent in value creation and innovation within the capital market space. The Nigerian stock exchange awarded Meristem as the best digital broker of the year. In 2018 also, Meristem became the first Nigerian asset management firm to attain compliance with the Global Investment Performance Standards (GIPS) by the CFA Institute. In 2017, Meristem handled the single largest trade in the history of the Nigerian Stock Exchange.