According to Nigerian Law what is Tax Rebate? Its Calculation,Reasons,Documentation & Methods Tax Rebate/Tax Refund A tax refund or tax rebate is a payment to the taxpayer when the taxpayer pays more tax than they owe. Calculation of Tax Rebate/Tax Refund Tax rebate/Tax refund = Input tax – Output Tax Input Tax An input tax is a levy paid by a business on acquired goods and services. An example of an input tax is the value added tax . When a business then taxes its customers , this is considered an output tax. The business pays the federal revenue authority the difference between the output tax and input tax if the amount is positive, or it can apply for a tax refund if the amount is negative. Output Tax Output tax is the VAT that is calculated and charged on the sale of goods and services from your business, if you are VAT-registered. This must be calculated on sales to other businesses and consumers alike. Output VA