VAT registration thresholds in Nigeria — when must a business register with FIRS?

Overview

Value Added Tax (VAT) registration in Nigeria is governed primarily by the Value Added Tax Act and administered by the Federal Inland Revenue Service (FIRS).

Key threshold

Businesses with taxable supplies of ₦25 million or more per annum are generally required to register for VAT. Below this threshold, registration may still be voluntary — and many growing SMEs register early to recover input VAT on purchases.

Steps to register

1. Obtain a Tax Identification Number (TIN) if you do not already have one.
2. Complete VAT registration via the FIRS online portal or designated tax office.
3. Begin filing monthly VAT returns (Form VAT 002) even in nil-return months.
4. Issue compliant tax invoices showing your VAT registration number.

Common mistakes

• Failing to register after crossing the turnover threshold
• Not separating output VAT from sales proceeds in bookkeeping
• Missing monthly filing deadlines (penalties accrue quickly)

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