VAT Exemption in Nigeria
Value Added Tax (VAT) is a tax levied on goods and services consumed. It is an indirect tax wherein the payment burden is borne by the final consumer of the goods and services. This tax was created by the VAT Act No. 102 of 1993 which became effective on January 1st, 1994, and it kicked off with a rate of 5% on February 1st, 2020 the rate was changed to 7.5%. We will discuss the exempted Goods and Services and how they are filed. There are various reasons why the Federal Government exempts some goods and services from paying VAT. The Federal Inland Revenue Service (FIRS) is the Federal Government agency responsible for collecting Value Added Tax (VAT) in Nigeria.
Some several goods and services are VAT-exempted in Nigeria, this includes:-
BASIC FOOD ITEMS:-basic food is defined as any unprocessed staple food item, whether or not it is packaged. http://www.sowprofessional.com
EDUCATIONAL MATERIALS:- including Laboratory Equipment.
Machinery:- whether or not electrically heated, for the treatment of materials by a process involving a change of temperature such as heating cooking, roasting, boiling, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes, instantaneous storage water heaters and electrics.
BABY PRODUCTS:- Feeding bottles and related products for babies items.