One of the most important settings in the Overview section is your VAT (Value Added Tax) configuration. This determines how tax appears on your invoices, receipts, and all customer-facing documents.
Important: If your business is not permitted to charge VAT, you can skip this section entirely. Not all businesses are required to collect VAT.
If you are not sure if your business can charge VAT?
Check out:Which businesses are allowed to charge VAT in Nigeria(link to resource)
If you’re still unsure, consult with a local accountant or tax professional. Getting this wrong can cause compliance issues!
Setting Your VAT Rate
If your business is permitted and required to collect VAT, here’s how to configure it:
Step 1: Find the VAT Section
On the Overview page, scroll down to the business settings area. You’ll see a field labeled “VAT billing %”
Step 2: Enter Your Tax Percentage
Next to the VAT rate, you’ll see the “Default tax” dropdown. This is crucial because it determines how tax is calculated:
Inclusive (Tax is already included in your selling price)
Exclusive (Tax is added on top of your selling price)
To select:
1. Click the “Default tax” dropdown
2. Choose either “Inclusive” or “Exclusive”
3. This becomes the default for all products (you can override it for specific products if needed)
Important: Whichever you choose, be consistent. Changing this later can confuse customers and complicate your records.
Default Currency
Your default currency was set when you first created your business account (covered in Setting Up Your Business Profile).
You’ll see it displayed here (e.g., “NGN” for Nigerian Naira, “GHS” for Ghanaian Cedi, “KES” for Kenyan Shilling).
This currency is used for:
– All invoices and receipts
– Financial reports
– Product pricing
– Sales transactions