Who is responsible for value added tax? Any person earning an annual turnover of more than Rs. 5 lakh by supplying goods and services is liable to register for VAT payment. Value-added tax or VAT
Who is responsible for value added tax?
Any person earning an annual turnover of more than Rs. 5 lakh by supplying goods and services is liable to register for VAT payment. Value-added tax or VAT is levied both on local as well as imported goods.
Who is subject to VAT?
In general, VAT applies to all sales of goods and services in the ordinary conduct of trade or business or profession, and those which are incidental thereto. Isolated transactions are not subject to VAT as a rule. In short, because you are into trade, business, or practice of profession, then, you are liable to VAT.
What is the main disadvantage of a value added tax?
As the VAT is based on full billing system, VAT implementation is expensive. It is not a simple task to calculate value added in every stage is not an easy task. Thus VAT is difficult to understand.
How is value added tax calculated in Nigeria?
VAT is calculated at a flat rate of 7.5% on all goods and services sold in Nigeria; this is stipulated under section 4 of the VAT Act, except items that are on the VAT exempt list or zero-rated. An example of such is exported goods, all exported goods are zero-rated, that is such goods are VAT-able but at zero percent.
In what instances is VAT applicable?
VAT applies to practically all sales of services and imports, as well as to the sale, barter, exchange, or lease of goods or properties (tangible or intangible). The tax is equivalent to a uniform rate of 12%, based on the gross selling price of goods or properties sold, or gross receipts from the sale of services.
What is the current VAT rate in Nigeria 2020?
7.5%
The main VAT rate in Nigeria is 7.5% (raised from 5% on 1st Feburary 2020). Only a limited number of supplies are nil-rated, meaning any VAT suffered may be recredited to the tax payer.
What is the new percentage rate of value added tax in Nigeria?
Regarding implementation, although the Finance Act has a commencement date of 13th January, 2020, the Minister for Finance, Budget and National Planning announced 1st February, 2020 as the commencement date for the implementation of the VAT rate of 7.5%.