How to Claim Input VAT on Business Purchases in Nigeria

If you are registered for VAT, you charge 7.5% on your sales and pay it to the NRS. But you also pay VAT on things you buy for the business. That VAT, called input VAT, can be set against the VAT you collect, called output VAT. You only pay the difference.

Businesses of every size pay more VAT than they should simply because they cannot find the supplier invoices to prove what they paid. For manufacturers and other capital-heavy businesses, the 2025 changes make this much more valuable.

What changed in 2025

Under the old rules, input VAT on services and on fixed assets was largely not recoverable. The Nigeria Tax Act 2025 changed that: VAT paid on services and on capital purchases, such as equipment, can now be claimed. For a growing business buying machines, vehicles or professional services, that is real money.

A worked example

• This month you invoice ₦4,000,000 plus VAT, so you collect ₦300,000 of output VAT.
• You buy stock, a generator and accounting services worth ₦1,600,000 plus VAT, paying ₦120,000 of input VAT.
• Your VAT payable for the month is ₦300,000 minus ₦120,000, which is ₦180,000.

Without the supplier invoices, you would pay the full ₦300,000.

What you need to make a claim

• A proper supplier invoice for each purchase, showing the supplier's TIN and the VAT separately. A bank alert or a receipt with no VAT line is not enough.
• Proof the purchase was for the business.
• Records kept for the period the law requires, and ready to retrieve if the NRS asks.

VAT returns are filed monthly, by the 21st of the following month. The work is much easier if each bill is captured when it arrives instead of at month end.

How Billif helps

Forward supplier bills to your Billif mailbox and they are read automatically and filed as payables, with the VAT captured. Staff receipts are captured in spend and reimbursement. The VAT report sets output VAT against input VAT, so the net figure is ready when you file.