Question and Answer: VATable Goods and Services

Question and Answer

Q1: What are VATable Goods and Services?

Ans:

VATable Goods are all goods manufactured/assembled in or imported into Nigeria, except those specifically exempted under the law. Examples of VATable goods include jewelries, shoes, bags, television etc.

VATable Services are all services rendered by any person in Nigeria except those specifically exempted under the law. Examples of VATable services are, services rendered by Lawyers, Engineers, Accountants, Contractors and Consultants etc.

Q2: What are the exempted goods and services under Value Added Tax (VAT) Act?

Exempted goods are those goods which are not subject to VAT.

These include:

  • All medical and pharmaceutical products.
  • Basic food items.
  • Books and Educational materials.
  • Baby products.
  • Fertilizer (locally produced), agricultural and veterinary medicine, farming machinery and farming transportation equipment.
  • Plant and Machinery imported for use in the Export Processing Zone or Free Trade Zone; provided that 100% production of such company is for export.
  • All commercial Aircraft and Aircraft spare parts imported for use in Nigeria.
  • Amorphous Pet Chips (HS Code 3907.6000.00)

Exempted services are services that are not VATable, i.e. not subject to 5% VAT.

These include:

  • Medical services.
  • Services rendered by Community Banks.
  • People’s Banks and Mortgage Institutions.
  • Plays and performance conducted by the educational institutions as part of learning.
  • All exported services.