AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
To claim input VAT, a supplier's invoice should be a proper VAT invoice: under section 153 of the Nigeria Tax Act 2025 it shows the supplier's tax ID and registration number, an invoice number, the supplier's name and address, the date of supply, your name, the gross amount, and the VAT charged with its rate. From 1 January 2026, input VAT on services and fixed assets used for taxable supplies is also claimable, within five years.
For a VAT-registered Nigerian business, every naira of VAT paid to suppliers that can be set against VAT charged to customers is money back in the business. The 2025 tax laws widened what can be recovered, but they also put more weight on the invoice itself. An owner abroad who signs off on supplier payments needs a quick way to tell whether an invoice will support a claim.
What changed in 2026
The Nigeria Tax Act 2025 (NTA) and the Nigeria Tax Administration Act 2025 (NTAA) took effect on 1 January 2026. The VAT rate stays at 7.5%. Forvis Mazars' summary of the VAT changes (16 March 2026) highlights three points that matter for input VAT:
- Wider recovery. Input VAT on services and on fixed assets used to make taxable supplies is claimable.
- A time limit. Claims must be made within five years.
- Small suppliers. A small business is exempt from charging VAT. A larger company buying from an exempt small business must self-charge VAT on those supplies.
On the small-business test, the Nigeria Revenue Service's published text of the NTAA defines a small business as one with gross turnover of ₦100 million or less a year and fixed assets of not more than ₦250 million, excluding professional service providers. The June 2025 gazette print read ₦50 million, so check the version your adviser uses.
What the invoice must show
Mondaq's May 2026 review of the VAT provisions sets out section 153 of the NTA. A VAT invoice must carry:
| Field | Why it matters |
|---|---|
| Supplier's tax ID | Shows the supplier is registered and lets the authority match your claim to their output VAT |
| Supplier's incorporation or registration number | Links the invoice to a real CAC entity |
| Invoice number | Prevents the same invoice being claimed twice |
| Supplier's name and address | Identifies the supplier |
| Date of supply | Places the VAT in the right month |
| Purchaser's name | Must be your company, not a staff member |
| Gross amount | The value of the supply |
| VAT charged and the rate | The amount you are claiming |
A till slip, a WhatsApp message with a total, or a pro forma invoice will usually lack several of these. The most common gaps are a missing tax ID, a purchaser name that is a manager rather than the company, and a lump sum with no VAT shown separately.
E-invoicing
The NRS is phasing in electronic invoicing through its Merchant Buyer Solution. The Guardian (27 July 2026) reports a 31 July 2026 deadline for large taxpayers with turnover of ₦5 billion or more, onboarding of medium taxpayers (₦1 billion to ₦5 billion) from July 2026 with enforcement expected in early 2027, and smaller businesses later, with full adoption targeted for January 2028. E-invoices carry an Invoice Reference Number, and buyers are expected to accept only compliant e-invoices; reported penalties include restriction of input VAT credit. If your supplier is a large taxpayer, ask for the e-invoice, not a PDF.
What cannot be claimed
- VAT on inputs used to make VAT-exempt supplies. Mondaq notes this is not reclaimable, while zero-rated suppliers can get refunds.
- VAT on purchases not used for the business's taxable supplies, such as private spending.
- VAT that was never charged on a proper invoice. Where a supplier invoiced without VAT, section 155(2) lets the authority direct the buyer to self-account.
Checks before you approve a supplier payment
- Is the invoice addressed to the company, with its registered name?
- Does it show the supplier's tax ID and CAC number? Search the CAC register if the name is new to you.
- Is VAT shown separately at 7.5%, and does gross plus VAT equal the total?
- Is the invoice number new in your ledger?
- Is the supplier VAT-registered, or is it a small business that should not be charging VAT at all?
- File the invoice with the payment record. Section 31 of the NTAA requires records to be kept for at least six years.
Worked example
Example only. In May your company charges customers ₦4,000,000 plus VAT of ₦300,000. You buy stock for ₦1,600,000 plus ₦120,000 VAT and a generator service for ₦400,000 plus ₦30,000 VAT, both on proper invoices. Input VAT is ₦150,000, so the net VAT due is ₦300,000 minus ₦150,000, which is ₦150,000. If the service invoice lacked the supplier's tax ID and you dropped it, you would pay ₦180,000. The return is due by the 21st of June, whether or not you traded (NTAA section 22).
Where Pryme fits
Read VAT registration for a business run from abroad first if you are not yet registered. With a Pryme Business Account, the Finance agent can check incoming supplier invoices against the fields above and flag gaps before payment, and the Compliance agent can prepare the monthly VAT schedule for you to approve. For the supplier side, see what to put on an invoice in Nigeria.
Questions people ask
Can I claim VAT on services in Nigeria now?
Under the Nigeria Tax Act 2025, from 1 January 2026 input VAT on services and fixed assets used for taxable supplies is claimable, according to Forvis Mazars' summary.
What must a VAT invoice show in Nigeria?
Section 153 of the Nigeria Tax Act 2025: supplier tax ID, registration number, invoice number, supplier name and address, date of supply, purchaser name, gross amount, and VAT charged with the rate.
How long do I have to claim input VAT?
Forvis Mazars reports a five-year limit for claims under the 2025 Act.
My supplier is a small business and charged no VAT. What now?
Small businesses are exempt from charging VAT. A larger company buying from one may have to self-charge VAT on that supply; ask your adviser.
Sources
- Mondaq: Examination of the VAT provisions under the Nigeria Tax Act 2025 (28 May 2026) · accessed Oct 2026
- Forvis Mazars: 2025 NTA VAT key business changes (16 Mar 2026) · accessed Oct 2026
- Nigeria Revenue Service: Laws and regulations · accessed Oct 2026
- The Guardian: NRS e-invoicing deadline for large taxpayers (27 Jul 2026) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.