Value Added Tax (VAT) is an indirect form of taxation that is based on the consumption pattern of individuals and companies. In Nigeria VAT is a 5% charge on all goods and services except for those exempted.

Organisations are by law expected to remit VAT charged to invoices on behalf of the Federal Inland Revenue Service. However, in remitting the taxes to the FIRS, organisations are also expected to deduct certain Vat expense (called Input) Vat that they also incur.

Tax invoices are to contain the following information:

• Taxpayers Identification Number (TIN);
• Name, address and VAT registration number;
• Customer¡¦s name and address;
• Type of supply;
• A description of the goods and services supplied;
• Quantity of goods or extent of services;
• The rate of VAT;
• The rate of any cash discount offered; and
• The total VAT payable.