The Federal Government has introduced a new legislative bill aimed at exempting various essential goods and services from Value Added Tax (VAT), in an effort to reduce the financial burden on Nigerians.
The bill, titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, Instruments, and Related Matters,” was presented on October 4, 2024.
Among the goods listed for VAT exemption are baby products and locally manufactured sanitary towels, pads, and tampons, a move expected to make these items more affordable for the general public. Other exemptions include military hardware, arms, ammunition, and uniforms provided to the armed forces and security agencies.
Additionally, shared passenger road transport services will be exempt from VAT, which is aimed at reducing transportation costs for commuters. In the agricultural sector, equipment such as tractors and ploughs will also benefit from VAT relief, although individuals must initially pay the tax before applying for a refund from the authorities.
The bill further extends VAT exemptions to diplomatic missions, with goods and services supplied to diplomats for non-profit activities falling under the tax relief. Educational institutions conducting plays or performances will also benefit, as will government licenses, land or building transactions, and financial instruments like money or securities.
Supplies used in export processing or free trade zones for approved activities will similarly be VAT-free, unless the Minister of Finance issues an order in the Official Gazette to reimpose VAT on these items, granting the government flexibility to modify the exemptions in the future.
This initiative is part of the government’s broader strategy to ease economic pressures on citizens while supporting key sectors such as agriculture, transportation, and education.
