VAT: when you charge it, and what you send on
VAT is money you collect for the government on top of your price. It was never yours. Here's how to keep it straight.
What VAT actually is
When you sell most goods or services in Nigeria, you add 7.5% to your price. That extra bit is VAT. You collect it from your customer and pass it on.
The mistake that hurts people is spending it. The money sits in your account and feels like yours. It isn't. BizBrada shows what you've collected so far so it never surprises you at the end of the month.
What you can take off
You also pay VAT when you buy from other registered businesses. That's called input VAT, and you subtract it from what you collected.
- VAT you charged on sales, minus
- VAT you paid on business purchases, equals
- what you send on
This is why entering your purchases matters as much as your sales. Every purchase you skip is money you hand over that you didn't have to.
Section 155: it is not only stock
Section 155 of the Nigeria Tax Act allows input VAT on goods, services and fixed assets to be deducted from the VAT on your taxable supplies — as long as it was incurred for the purpose of making those supplies.
So the generator, the delivery van, the shop fit-out, the accountant's fee and the software subscription all count, not just the stock you resell. Many owners claim only stock and quietly overpay.
What does not count is spending that was not for making taxable sales: personal money, drawings, loan repayments, salaries and tax payments. BizBrada leaves those out of the claim and says why on the line.
You still need a proper VAT invoice from the supplier. Spend we cannot tie to a company supplier is listed separately as awaiting an invoice, so you can chase it instead of losing it.
Sales that work differently
Some things carry no VAT — basic food, medicines, education, exports. In BizBrada you mark a record as exempt or zero-rated and it stays out of what you owe.
If you're not sure which a sale is, mark it vatable and ask us. Guessing low is the one that gets expensive later.
When it's due
VAT is monthly. You file for a month by the 21st of the following month.
BizBrada keeps a running position, so on the 1st you already know the figure. There's no scramble.