The Value Added Tax (VAT) Act in Nigeria exempts pharmaceuticals, educational items, and basic commodities.
President muhammadu while presenting the 2020 budget at the National Assembly on Tuesday, stated that VAT exemptions are expanding under the Finance Bill, 2019.
He noted specifically that section 46 of the Finance Bill, 2019 expands the exempt items to include some more items including food.
Below are some of the items that are exempted from the VAT act.
1. Brown and white bread;
2. Cereals including maize, rice, wheat, millet, barley and sorghum;
3. Fish of all kinds;
4. Flour and starch meals;
5. Fruits, nuts, pulses and vegetables of various kinds;
6. Roots such as yam, cocoyam, sweet and Irish potatoes;
7. Meat and poultry products including eggs;
9. Salt and herbs of various kinds; and
10. Natural water and table water.
The President in his speech added that his proposals also raise the threshold for VAT registration to N25 million in turnover per annum, such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for Micro, Small and Medium-sized businesses.
According to President Buhari, it is absolutely essential to intensify the nation’s revenue generation efforts.
He notes that his administration remains committed to ensuring that the inconvenience associated with any fiscal policy adjustments, is moderated, such that the poor and the vulnerable, who are most at risk, do not bear the brunt of these reforms.