VAT Modification Order: Any Contrary Position Expressed by the FIRS Cannot Stand


Thursday, June 25 , 2020 / 09:25 AM / By Taiwo Oyedele via Twitter / Header Image Credit: FIRS


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The FIRS, yesterday issued a public notice (reproduced below) indicating that the following items stated in the VAT Modification Order are still subject to VAT: 

  • natural gas;
  • materials for pharmaceutical products;
  • renewable energy equipment; and
  • materials for baby diapers & sanitary towels.


It is instructive to note that S.38 of the VAT law says 'the Minister may by order published in the Gazette -

(a) amend the rate of tax chargeable; and

(b) amend, vary or modify the list set out in the First Schedule to this Act (i.e. Goods & Services exempt)


The VAT Modification Order issued by the Minister stated clearly that:

"the extended list of items exempted from VAT in the First Schedule to the VAT Act is as specified in the Schedule to this Order."


Taiwo Oyedele of PWC Tax Practice responded that, given the clear and unambiguous provisions of the VAT Act and the VAT Modification Order, "any contrary position expressed by the FIRS below cannot stand".

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The FIRS Public Notice  - The Value Added Tax (Modification Order 2020): Items Not Exempted from VAT


The Service received several enquiries from taxpayers requesting to know whether or not some items are exempt from VAT in view of their inclusion in paragraph 2 of Value Added Tax (VAT) (Modification) Order 2020.


The Service hereby clarifies as follows:

  1. The main objective of the VAT Modification Order was to provide clear definition of each item listed in the First Schedule to the VAT Act through an extended list of the items so exempted.
  2. Paragraph 2 of the Modification Order provides breakdown (including the Common External Tariff (CET) Code) of items exempted from VAT under the VAT Act. The breakdown is to guide importers, other stakeholders and the Nigerian Customs Service (NCS) on the items to which VAT would not be charged at the ports.
  3. The following items included in the breakdown are not exempt from VAT as they were not listed in schedule 1 to the VAT Act or in a previous Ministerial Order: (a) Natural gas (b) essential raw materials for the production of pharmaceutical products (c) renewable energy equipment (d) raw materials for the production of baby diapers and sanitary towels. These items shall continue to be liable to VAT at 7.5% until otherwise provided in an appropriate statutory instrument.


Consequently, all taxpayers, tax practitioners, tax officials, other stakeholders and the general public should be guided accordingly.


See published notice below.


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Related Links

1.       Highlights from Conference Call with Minister of Finance, CBN Governor and Budget Office

2.      Nigeria's Economic Sustainability Plan 2020 In Response to COVID-19

3.      Finance Minister Issues Order Expanding the Goods and Services Exempt from VAT in Nigeria

4.      VAT Modification Order 2020 (Extended List of Items Exempted From VAT)


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