FIRS Issues Public Notice on VAT (Modification Order) 2020

FIRS Issues Public Notice on VAT (Modification Order) 2020

Friday, June 26, 2020 09:35
AM / by KPMG Nigeria
/ Header Picture Credit score: KPMG Nigeria

The Federal Inland Income
Service (FIRS) on Wednesday, 24 June 2020 issued a Public Discover to make clear enquiries
obtained from taxpayers on the tax exempt standing of some gadgets included in
Paragraph 2 of the just lately printed Worth Added Tax (Modification Order),
2020 (“the Order”).  The Order was signed
by the Honourable Minister of Finance, Finances and Nationwide Planning (HMoF),
Mrs. Zainab Shamsuna Ahmed, pursuant to her powers underneath Part 38 of the
Worth Added Tax Act (VAT), Cap. V1, Legal guidelines of the Federation of Nigeria, 2004 (as

The FIRS asserts within the Public Discover that the:


(a) predominant goal of the
Order was to make clear the definition of the gadgets exempted within the First Schedule
to the VAT Act by way of extension of the record. 


(b) inclusion of the
Frequent Exterior Tariff codes of the exempt gadgets in Paragraph 2 of the Order
was to information importers, Nigerian Customs Service and different related
stakeholders on gadgets that may not be topic to VAT on the ports.


(c) following gadgets
(hereafter known as “alleged non-exempt gadgets”), although included in
Paragraph 2 of the Order, stay liable to VAT at 7.5% till they’re exempted
by an applicable statutory instrument:


  • pure fuel;
  • important uncooked supplies
    for manufacturing of pharmaceutical merchandise;
  • renewable vitality
    gear; and
  • uncooked supplies for
    manufacturing of child diapers and sanitary towels. 


The issuance of the Order and the modification of the
First Schedule to the VAT Act are throughout the statutory powers of the HMoF underneath
the VAT Act.  Due to this fact, the provisions
of the Order are binding on all stakeholders within the tax system, together with the


The issuance of the Public Discover by the FIRS,
which contradicts the categorical provisions of the Order, raises the query
whether or not a Public Discover issued by the FIRS can override a subsidiary
laws promulgated by the HMoF pursuant to her energy underneath VAT Act to
amend, fluctuate or modify the record set out within the First Schedule of the Act. 


It’s pertinent to discuss with the judgement of the
Federal Excessive Court docket (FHC) within the case of Heat Spring & Ors. vs FIRS
(FHC/L/CS/157/2015), the place the courtroom upheld that “…neither the FIRS nor its
Chairman is legally empowered to make an order to both amend, fluctuate or modify
the record of VAT exempt gadgets…”.  Thus,
the place the FIRS is of the view that the alleged non-exempt gadgets have been
erroneously included in Paragraph 2 of the Order, the error can’t be validly
corrected by way of a public discover. A public discover is an administrative
doc and can’t override the Order duly issued by the HMoF and printed 

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Associated Hyperlinks

  1. FIRS
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  2. VAT
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4.     Nigeria’s
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5.     Finance Minister
Issues Order Expanding the Goods and Services Exempt from VAT in Nigeria

6.     VAT Modification
Order 2020 (Extended List of Items Exempted From VAT)

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