The Federal Government of Nigeria has published the Value Added Tax (Modification Order)

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The Federal Government of Nigeria has published the Value Added Tax (Modification Order), 2020 (“the Order”) in its Official Gazette No. 18, Vol.107 of 4 February 2020. The Order commenced on 3 February 2020 and was signed by the Honourable Minister of Finance, Budget and National Planning (HMoF),
Mrs. Zainab Shamsuna Ahmed, pursuant to her powers under Section 38 of the Value Added Tax (VAT) Act, Cap. V1, Laws of the Federation of Nigeria, 2004 (as amended). The Order modifies the First Schedule to the VAT Act by defining and expanding the list of goods and services exempted from VAT and providing clarity on the interpretation of the VAT Act as amended by Finance Act, 2019. Highlights of the Order include:
1. Adoption of “basic food items” as described in the Finance Act, 2019 but excluding such items sold at restaurants, hotels, eateries, lounges and other similar premises.
The Order further provides that basic food items sold by contractors, caterers and other similar vendors will not qualify for the exemption.
2. Definition of the following terms with examples:
• Baby products
• Downstream gas utilisation
• Educational books
• Educational materials
• Equipment
• Farming machinery and implements and farming transportation equipment
• Fertilizers
• Locally produced agricultural and veterinary medicines
• Locally produced animal feeds
• Machinery
• Medical equipment
• Medical products
• Pharmaceutical products
• Plant
• Medical services
• Shared passenger road-transport service
• Lease and rental of residential building

3. Extended list of items exempted from VAT with their Common External Tariff (CET) Codes. The Order provides the CET Codes for the following items:
• Medical and pharmaceutical products
• Basic food items
• Books and educational materials
• Baby products
• Plant, machinery and equipment purchased for utilisation of gas in downstream petroleum sector
• Petroleum products (incorporating provisions of the Value Added Tax Act (Schedule Modification) Order, 2018 signed by the HMoF to exempt petroleum products like automotive gas oil, aviation turbine kerosene, household kerosene, liquefied petroleum gas and premium motor spirit from VAT

• Fertilizer, locally produced agricultural and veterinary medicine and farming machinery
• Essential raw materials for the production of pharmaceutical products
• Renewable energy equipment
• Raw materials for the production of baby diapers and sanitary towels.

CLICK HERE TO DOWNLOAD THE COPY OF THE ORDER https://assets.kpmg/content/dam/kpmg/ng/pdf/tax/value-added-tax-(modification-order)-2020.pdf



https://home.kpmg/ng/en/home/insights/2020/05/federal-government-issues-official-gazette-on-vat--modification-.html

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