VAT which stands for Value-Added Tax, is a standard charge on goods and services. VAT rate is a percentage of the cost of goods and services. In Nigeria, VAT rate is 7.5%. The companies that manufacture goods and provide services collects the VAT from their consumers and remit same to the government.
Some goods and services are VAT exempted, which are called Zero-rated items. Zero-rated items include goods and services purchased by diplomats, goods purchased for use in humanitarian donor-funded projects, and goods purchased for social development. Exempt items include plants and machinery for use in export processing zones (EPZs) or free trade zones (FTZs), basic food items (based on a specific list), medical products and services, pharmaceutical products, books and educational materials, and exported services.
Top Leading V.A.T Paying Sectors
Manufacturing N281bn
ICT N193bn
Mining and Quarrying N107bn
Financial Services N93bn
Public Administration N71bn
Trade N63bn
Transportation N32bn
Other Services Activities N26bn
Construction N18bn
Electricity N6bn