The New Value Added Tax (VAT) Modification Order, 2020

Nigeria’s Minister for Finance, Budget and National Planning has recently issued a Value Added Tax (Modification Order) 2020. It presents a detailed analysis and interpretations of goods and services exempt from Value Added Tax (VAT) in Nigeria. It also expands the list to add a few more goods and services as VAT exempt.

The Order is effective from 3 February 2020 and can be downloaded here.

Here are some highlights of the Order:

  1. Basic food items as described in the Finance Act 2019 is the same as what is described in the Order but excludes basic food items (including water) sold in restaurants, hotels, lounges, eateries and other similar premises. It also excludes basic food items sold by contractors, caterers and other similar vendors. This implies that basic food items (as described – see the Order to view the full list/description) are exempt from VAT except when they are sold in eateries or by contractors, caterers and similar vendors.
  2. Baby products are exempt from VAT only when they relate to babies that are 0 to 36 months old (that is 3 years and below). All other older Children’s items are not VAT exempt.
  3. Educational books, courses and materials (both physical and electronic) are exempt from VAT only when they are used to implement instruction and facilitate learning in proper schools /educational institutions (e-books/apps/courses sold by other organisations, for instance are not included).
  4. Pharmaceuticals, medical equipments and medical services that are exempt from VAT are those components and finished products that cure diseases, preserve health and life. It does not include cosmetology or fitness devices or other similar devices.
  5. Shared passenger road transport service that are available for use by the general public are VAT exempt (does not include hired or rented vehicles or transportation apparatus for private use).
  6. Lease and rental of residential accommodation by persons other than corporate entities is VAT exempt. This means that corporate entities will continue to pay VAT on the rentage of residential accommodation for their staff, guest, etc.
  7. Fuel, gas, kerosene are now officially exempt from VAT.
  8. See the full Order for the expanded list (with CET codes) of all goods and services exempt.

Vi-M recently held a masterclass webinar on VAT and how it applies to businesses in Nigeria, including changes as made by this Order, by the Finance Act, 2019 and as explained by the Federal Inland Revenue Service in its Information Circulars on the provisions of the Finance Act.

If you are interested in viewing a recording of this VAT masterclass, please send an email to with your name and phone number and we will revert to you.

You can also download the Tax Law Book App to access all the tax laws and regulations as they are updated.