Value Added Tax Act, 1993
The Value Added Tax (VAT) Act imposes a tax on the supply of goods and services in Nigeria. Originally enacted in 1993, it provides the legal basis for the collection of VAT by the Federal Inland Revenue Service on behalf of the Federal Government. The Act defines taxable supplies, exemptions, registration requirements, and the computation of VAT.
Legal area: Law governing the assessment, collection, and administration of taxes.
Year enacted: 1993
Full text: https://lawsofnigeria.placng.org/laws/value-added-tax-act.html
Key Provisions
- Section 2: Charge of VAT on goods and services at the prescribed rate
- Section 5: Exempted goods and services including basic food items and medical supplies
- Section 8: Registration requirements for VAT-liable businesses
- Section 13: Collection and remittance of VAT by taxable persons
- Section 15: Returns and payment of VAT to the FIRS
- Section 25: Offences and penalties for non-compliance
Significance
VAT is a significant source of revenue for the Nigerian government. The rate has been adjusted several times, most recently to 7.5% in 2020. The Finance Act 2019 expanded the scope of exempted items and addressed digital transactions for VAT purposes.