Appointed to withhold VAT: what you must do
What a Nigerian business must do once the NRS appoints it to withhold VAT: withholding, remitting by the 14th, the separate return and its schedule.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
Launching soon. Some of the screens this article describes for Nigerian and Kenyan businesses are not reachable in Achekam yet. They are coming soon.
The notice from the Nigeria Revenue Service may be brief, but it changes how your accounts payable team works from the day it takes effect. Your business has been appointed to withhold VAT. From now on, the VAT on many of your suppliers' invoices no longer goes to the supplier; it goes to the NRS, through you, on a deadline and with paperwork of its own.
Get it right and the change is mostly a matter of routine. Get it wrong and the business can end up paying VAT twice, once to the supplier and again to the NRS, or explaining to the NRS why withheld money was never remitted. This guide walks through the appointment, what to withhold, the deadline, the separate return, and how to run it month by month.
The appointment and the currency rule
The Nigeria Tax Act, 2025 gives the NRS the power to appoint withholding agents. As the NRS restates section 150(3) in its guidelines, it may appoint any person, including a non-resident supplier of taxable goods, to deduct or withhold VAT. The appointed person must remit the VAT deducted or withheld to the NRS in the currency of the transaction.
The currency point is easy to miss. If you pay a supplier in dollars, the VAT you withhold on that invoice is remitted in dollars, not converted into naira.
Some withholders do not need an appointment letter at all. Section 155 of the Act requires Federal, State and Local Governments and their Ministries, Departments or Agencies, along with any other person the NRS appoints, to collect or withhold VAT on taxable supplies made to them. The Act also covers supplies from abroad: under section 151(2), where a non-resident makes taxable supplies from outside Nigeria to persons in Nigeria, the recipient must withhold the VAT and remit it, unless the NRS has appointed the supplier to collect it and it has done so.
The NRS's Guidelines on the Withholding of Value Added Tax, published as Information Circular No. 2026/18, set out the appointment, the agent's duties and the return in full, and replace the earlier FIRS circular on the subject.
Withholding the VAT instead of paying it
The core duty is simple to state. The NRS says an appointed agent must withhold the VAT stated on its suppliers' invoices: the VAT is not paid to the supplier. The supplier receives the invoice amount without the VAT, and the agent pays the VAT to the NRS.
A worked example in words: a supplier invoices your company for goods, with VAT shown on the invoice. Your payables team pays the supplier the price excluding VAT. The VAT amount stays with your business until it is remitted to the NRS by the deadline below. The supplier's invoice is fully settled, partly by the payment to it and partly by the remittance to the NRS on its behalf.
Before you rely on a supplier's details for the remittance, confirm its Tax ID; see checking a supplier's Nigeria Tax ID before you pay.
Remitting by the 14th, separately from VAT collected
The NRS says the amount withheld must be remitted on or before the 14th day of the month immediately following the month of the transaction. Its circular on the changes in VAT administration draws the contrast with your own VAT: a taxable person files returns and remits VAT collected within 21 days of the month following the month of the transaction, and files returns and remits VAT withheld within 14 days.
So an agent works to two dates each month: the 14th for VAT withheld from suppliers, and the 21st for its own VAT collected on sales. The NRS also says VAT withheld should be remitted separately from VAT collected on supplies. Do not net one against the other. Your own VAT return timing is covered in VAT return due dates and nil returns.
The separate return and its supplier schedule
Remittance comes with a return. The NRS says an appointed agent must file a separate VAT return for VAT withheld on or before the 14th day of the following month, in the currency of the transaction, through the NRS tax administration solution. The return carries a schedule showing, for each supplier:
- the supplier's name, Tax ID and address;
- the invoice number;
- the gross invoice amount;
- the VAT amount; and
- the month to which the return relates.
The NRS provides templates for withholding VAT returns, as it does for withholding tax and withheld stamp duty returns, each completed and uploaded on Rev360 to report and remit the amounts deducted.
Supplier records and bills in Achekam, and filing it yourself
The schedule is only as good as your supplier records. Achekam keeps one supplier list for the business, with duplicate checks by name or VAT number, and quotations, orders and bills all pick suppliers from it. Keep each supplier's Tax ID and address current there, so that every bill points at one clean supplier record.
Supplier bills are recorded line by line with VAT. A bill without a purchase order waits for approval before it posts, and a bill can be paid in full or in parts from the bank account you choose. Agree with your accountant how the withheld VAT is recorded, so the supplier's bill shows as settled and the VAT shows as owed to the NRS until it is remitted.
Filing stays with you. Achekam does not file Nigerian tax returns: a person with the business's NRS filing permission files on Rev360 and uploads the receipt, and a different person verifies it before the return counts as filed.
An agent's monthly checklist
- List every supplier invoice paid in the month that carried VAT.
- Confirm VAT was withheld, not paid to the supplier, on each.
- Check each supplier's name, Tax ID and address against your records.
- Build the schedule using the NRS template.
- File the separate withholding VAT return on Rev360 by the 14th, in the currency of each transaction.
- Remit the VAT withheld by the 14th, separately from VAT collected.
- Upload the receipt to Achekam for a second person to verify.
Start by telling your payables team and your regular suppliers the date the appointment takes effect; most problems in the first month come from invoices paid the old way.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
