Value Added Tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain. The Nigeria Tax Act 2025 retains the standard rate but improves administration.
The standard VAT rate remains at 7.5%.
A major reform allows businesses to claim input VAT on both services and capital assets (like machinery and furniture). Previously, this was restricted to goods/materials directly used in production.
The list of zero-rated goods (attracting 0% VAT) has been expanded to include essential food items, medical and pharmaceutical products, books, and educational materials.
