Companies and enterprises are expected to register for VAT within six months of incorporation or registration of business name. Registering for VAT is now the same as obtaining Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).
With the Corporate Affairs Commission (CAC) online platform, TIN/VAT number is usually generated or issued upon incorporation of companies and business registration. Companies and enterprises are expected to state their VAT number on all their invoices to their customers.
The focus of VAT is on goods and services, hence no registered entity, business or organization including those specifically exempted from income tax is exempted from VAT. This means that; government agencies, churches, mosques, educational institutions, non-for-profit organizations (NGO) are liable to pay VAT when they consume vatable goods and services.
However, all non-oil exports, goods and services purchased by diplomats and goods used for humanitarian projects are zero rated. That is, VAT is charged at 0% instead of the standard rate of 5%.
As consumers of goods and services, ministries, parastatals and other agencies of government pay VAT on their consumption when they award contracts to contractors or purchase goods and services. However, as government agencies, they are to withhold the VAT charged and remit to the Federal Inland Revenue Service (FIRS). The VAT is to be remitted to the FIRS at the same time the payment for contract is made to the contractors.
The due date for filing VAT returns is 21st day of every month. VAT returns are filed at FIRS offices or online. Penalty for non-filing of VAT return is N5,000 for every month the failure subsists.