₦7,500
is the VAT on this price. Inside a VAT-inclusive price, VAT is 7.5/107.5 of the total, not 7.5% of it. That small difference is the most common VAT arithmetic mistake on invoices.
How this VAT calculator works
Value Added Tax in Nigeria is charged at a standard rate of 7.5% on taxable goods and services. The Nigeria Tax Act 2025, which took effect on 1 January 2026, kept the rate at 7.5%, so the arithmetic has not changed: a price before VAT is multiplied by 1.075 to get the VAT-inclusive total, and the VAT itself is 7.5% of the net price. This calculator does that in the add direction, and it also runs the direction people get wrong.
Removing VAT from a VAT-inclusive figure is not a matter of knocking 7.5% off. Because the VAT was charged on the smaller net price, the VAT inside a gross total is 7.5 divided by 107.5 of that total, roughly 6.98%. So a ₦107,500 receipt contains ₦7,500 of VAT, not ₦8,062. The remove direction divides by 1.075 and shows the honest split between the real price and the tax, which is what you need for expense claims, quotes given VAT-inclusive, and checking a supplier's arithmetic.
What did change in 2026 is who pays VAT on what. The reform zero-rated basic food, medicines and educational materials and exempted services such as healthcare, education and passenger transport, while widening the input VAT businesses can recover to cover services and fixed assets. The rate field is editable, so if you are modelling a different rate or a future change, type it in and every figure recalculates. Estimates only, not tax advice.
Frequently asked questions
How do I calculate 7.5% VAT on a price in Nigeria?
Multiply the price before VAT by 0.075 to get the VAT, and by 1.075 to get the total. A ₦100,000 invoice attracts ₦7,500 VAT, so the customer pays ₦107,500. Enter your own figure above and both numbers are worked out instantly.
How do I remove VAT from a VAT-inclusive price?
Divide the total by 1.075. The VAT inside a gross price is the total times 7.5 divided by 107.5, which is about 6.98% of the total, not 7.5% of it. On a ₦107,500 receipt the VAT is ₦7,500 and the real price is ₦100,000. Taking 7.5% of the gross figure overstates the VAT, and it is the most common mistake on invoices and expense claims.
What is the VAT rate in Nigeria in 2026?
7.5%. The Nigeria Tax Act 2025, in force from 1 January 2026, kept the standard rate at 7.5% after proposals to raise it to 12.5% or 15% were dropped. What changed instead is the base: many everyday essentials became zero-rated, and businesses can now recover more input VAT.
Which items are VAT-free in Nigeria?
From 1 January 2026, basic food items, medicines and pharmaceutical products, medical services, educational books and materials, and exports are zero-rated, while services such as healthcare, education and passenger road transport are exempt. Baby products, sanitary pads and key agricultural inputs are also relieved. Together the relieved categories cover a large share of household spending, which is why many receipts show no VAT at all.
Who must charge VAT in Nigeria?
Businesses with annual taxable turnover above ₦50 million must register for VAT and charge it on taxable supplies. Small companies, meaning turnover of ₦100 million or less and fixed assets of ₦250 million or less, are relieved from charging VAT under the 2026 regime. If you are below the threshold you do not add VAT to your invoices, but you also cannot claim input VAT.
What is the difference between zero-rated and exempt?
Both mean the customer pays no VAT, but they differ for the seller. A zero-rated seller charges VAT at 0% and can still recover the input VAT on their own purchases, including by refund. An exempt seller is outside the VAT net for that supply and cannot recover input VAT, so the VAT they suffered on inputs becomes a cost baked into their price.