Tax Settings
Configure tax collection for your payments and storefront orders. Set tax rates, choose pricing models, and ensure compliance.
Overview
Vaendora allows you to configure tax settings so that applicable taxes are automatically calculated and applied to transactions. Whether you need to charge VAT, sales tax, or any other levy, the tax settings give you full control over how taxes are handled.
- Enable or disable tax collection at any time
- Set custom tax rates as a percentage
- Choose between tax-inclusive and tax-exclusive pricing
- Taxes are automatically calculated on orders
- Tax details appear on receipts and invoices
Configuring Tax Settings
Set up tax collection for your account:
Navigate to Tax Settings
Go to Payments → Tax Settings in your dashboard.
Enable Tax Collection
Toggle the Enable Tax switch to start collecting taxes on transactions.
Set Tax Rate
Enter your tax rate as a percentage. For example, enter 7.5 for the standard Nigerian VAT rate of 7.5%.
Choose Pricing Model
Select how taxes are calculated relative to your product prices:
- Tax-Exclusive – Tax is added on top of the listed price
- Tax-Inclusive – Tax is already included in the listed price
Save Settings
Click Save to apply your tax configuration.
Consult a Tax Professional
Tax-Inclusive vs Tax-Exclusive Pricing
Understanding the difference between the two pricing models:
Tax-Exclusive Pricing
The listed product price does not include tax. Tax is calculated and added at checkout.
Example (7.5% VAT):
- Product price: ₦10,000
- VAT (7.5%): ₦750
- Customer pays: ₦10,750
Tax-Inclusive Pricing
The listed product price already includes tax. The tax amount is extracted from the total price.
Example (7.5% VAT):
- Product price (incl. VAT): ₦10,000
- Base price: ₦9,302.33
- VAT (7.5%): ₦697.67
- Customer pays: ₦10,000
Which Model to Choose?
How Taxes Appear on Orders and Receipts
When tax collection is enabled, tax information is displayed clearly:
- Checkout Page – Tax amount is shown as a separate line item during checkout
- Order Summary – Tax breakdown appears in the order details
- Receipts – Tax amount and rate are included on payment receipts
- Invoices – Generated invoices show subtotal, tax, and total
Order Breakdown Example
VAT Considerations for Nigerian Businesses
If your business is registered in Nigeria, here are key VAT considerations:
- Standard Rate – The current VAT rate in Nigeria is 7.5%, as stipulated by the Finance Act
- VAT Registration – Businesses with annual turnover above ₦25 million are required to register for VAT with the Federal Inland Revenue Service (FIRS)
- Exempt Items – Certain goods and services are VAT-exempt, including basic food items, medical supplies, and educational materials
- Filing Requirements – VAT returns must be filed monthly with the FIRS
- Tax Identification Number (TIN) – You need a valid TIN to register for and remit VAT
Tax Compliance
Enabling and Disabling Tax Collection
You can toggle tax collection on or off at any time:
- Enable – Tax is calculated and applied to all new transactions going forward
- Disable – Tax is no longer applied to new transactions. Previously collected taxes remain on historical records.
Changing tax settings does not retroactively affect past orders or transactions.
Best Practices
- Keep records – Maintain detailed records of all tax collected for reporting purposes
- Update rates promptly – If tax rates change, update your settings immediately to stay compliant
- Display clearly – Use tax-exclusive pricing if you want customers to see the tax breakdown at checkout
- Review regularly – Check your tax settings periodically to ensure they reflect current regulations
- Get professional advice – Work with an accountant familiar with Nigerian tax law