Nigeria Issues New VAT Withholding and Administration Guidance

Summary

The Nigeria Revenue Service has issued VAT withholding guidelines and Information Circular No. 2026/05 addressing the administration of VAT under the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025. The documents cover withholding, place and time of supply, valuation, filing, refunds and electronic fiscalization.
The guidance affects appointed withholding agents, government bodies, suppliers dealing with those agents, non-resident suppliers and businesses required to use the Electronic Fiscal System. It also explains how withheld VAT may be credited or refunded and how errors in withholding schedules should be corrected.
Businesses should update tax codes, invoice workflows, withholding schedules, vendor communications and reconciliation controls. The replacement of earlier FIRS circulars also means that historic procedures should be checked against the new legislation and guidance rather than carried forward automatically into the new regime.

Article

The Nigeria Revenue Service has issued Guidelines on the Withholding of Value Added Tax together with Information Circular No. 2026/05 on changes to VAT administration. The publications are intended to explain the implementation of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025.

The VAT withholding guidelines address the appointment and obligations of withholding agents. They include procedures for federal, state and local government bodies and their ministries, departments and agencies, as well as other persons appointed to withhold VAT. The guidance covers deduction, remittance, return filing and record retention, together with the treatment of transactions between two appointed withholding agents.

Special attention is given to supplies by non-resident suppliers. Businesses purchasing cross-border services or digital supplies should determine whether the non-resident supplier, the Nigerian customer or an appointed withholding agent is responsible for accounting for VAT. Contractual documentation and accounts-payable systems should clearly distinguish VAT withholding from other forms of tax deducted at source.

The Guidelines also address suppliers’ entitlement to recognize withheld VAT as a credit and, where appropriate, obtain a refund. This makes reconciliation critical. Suppliers should be able to match amounts withheld by customers with invoices, withholding schedules, remittance evidence and the VAT position reported in their returns. Unmatched deductions may otherwise create persistent VAT receivables or disputes with customers and the tax authority.

Information Circular No. 2026/05 has a wider administrative scope. It covers place-of-supply and time-of-supply rules, including special rules for connected persons, periodic supplies, progressive contracts and instalment credit arrangements. It also addresses valuation, input and output VAT, imported supplies, registration, filing, payment and refunds.

A further focus is implementation of the Electronic Fiscal System. Businesses within scope will need to align invoicing and transaction reporting with the fiscalization requirements and applicable system specifications. Failure to comply may expose taxpayers to penalties, making governance over system access, invoice numbering, data completeness and exception handling particularly important.

The new withholding Guidelines replace Information Circular No. 2023/14 dated 29 December 2023. Information Circular No. 2026/05 replaces FIRS Information Circular No. 2022/14 dated 4 April 2022. Businesses should therefore review procedure manuals and training materials that still refer to the superseded FIRS guidance.

The NRS’s public VAT page was identifiable, but direct publicly indexed copies of the two 2026 guidance documents were not located. Taxpayers should obtain the final documents directly from the NRS and confirm effective dates, filing formats and technical requirements before changing compliance processes.

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