FG's VAT Exemption List: 63 Items to Reduce Your Bills

63 Essential Items Now VAT-Exempt in Nigeria

These exemptions are outlined in the official 'Value Added Tax (Modification) Order, 2024,' dated...

Discover Nigeria's new economic reforms: VAT modification order, tax incentives for oil & gas production, exemptions for 63 basic items, and more.

The Federal Government of Nigeria has announced a list of 63 items that will be exempted from Value-Added Tax (VAT) as part of its latest fiscal reforms. This move is aimed at revitalizing the country's oil and gas sector, as explained by Finance Minister and Coordinating Minister of the Economy, Wale Edun.

The two key incentives include the VAT modification order and tax reliefs for deep offshore oil and gas production, as per the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.

Key VAT Exemptions:

Basic Food Items: additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, and water (natural water and table water) 

Energy Products: diesel, feed gas, liquefied petroleum gas (LPG), compressed natural gas (CNG), electric vehicles (EVs), liquefied natural gas (LNG) infrastructure, and clean cooking equipment

Educational Services: tuition fees relating to nursery, primary, secondary, and tertiary education 

Healthcare Products: sanitary towels, pads, or tampons 

Microfinance Services: services rendered by microfinance banks 

These exemptions are outlined in the official 'Value Added Tax (Modification) Order, 2024,' dated September 3, 2024, as announced by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. This move is expected to mitigate the potential downsides of the newly-enacted Finance Act on vulnerable segments of the society.

Key Fiscal Incentives:

VAT Modification Order: Exempts 63 essential items from Value-Added Tax (VAT)

Tax Reliefs: Provides tax incentives for deep offshore oil and gas production

Retroactive Provisions: The official gazette specifies that provisions concerning Automotive Gas Oil (AGO) are retroactive, taking effect from October 1, 2023.

These reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Ahmed Tinubu, in line with Policy Directives 40-42. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has also stressed that an abundance of opportunities remains to be harnessed in the country's oil and gas sector despite the current global energy transition.

The items exempted from VAT are listed below:

CNG/LPG Dual Fuel Vehicles

Dedicated LPG Vehicles and CNG/LPG Dual Fuel Vehicles

Parts, and semi-knocked down units (for assembly) of CNG and LPG buses.

Parts, and semi-knocked down units (for assembly) of Electric Vehicle

Electric Vehicles

Electric Vehicles Battery

Electric Vehicles Charging System

Electric Vehicle Solar Charging System

LPG/CNG Conversion Kits

CNG Cylinders

CNG Cascades

CNG Dispensers

Gas Generators

CNG Trucks (Bobtails and Bridgers; fixed axle and semi-trailers

Steel Pipes

Steel Valves & Fittings

SS Tubes & Fittings

Storage Tanks (all sizes)

Regulators

CNG Pumps and Compressors (all types)

Steel

Pressure Relief Valves

Hydraulic press/Rolling machine

Heat Treatment Equipment

Liquid Level Guage

Pumping Housing and Motors

Regulator Body

Pressure Guage

Truck Chassis

Metering and Measuring Equipment (including weighbridges, and filling scales)

Dispensing equipment (dispensing scales, nozzles, gas filling systems)

Safety Features (emergency shutoff valves, pressure relief valves, excess flow valves, breakaway couplings, quick release couplings)

Gas water heaters

Gas burners for industry

Gas boilers

Gas washing machines and dryers (launderettes) Household or laundry-type washing machines, including machines which both wash and dry.

CNG, LPG and Cyrogenic Hoses Tubes, pipes and hoses, and fittings thereof (for example, joints, elbows, flanges) of plastics.

CNG truck heads

Gas Leak Detectors

Gas air conditioners

Cylinder refurbishment equipment

Blending skid/unit

Odourizing unit

Chromatography unit (GC)

LNG Liquefying Equipment, Heat Exchangers, LNG Vapourizers, Regasification

Plant, Liquefied CNG Compression Terminals

LNG Plant, Machinery, Pumps, Compressors, Filters (Including Gas Filters),

Weighing Machines, Valves Equipment

Cyrogenic Storage Tanks, Liquefied CNG Conversion tanks

Pipes, Piping Fittings, and Flanges used for Liquefied Natural Gas processing

Electrical Equipment, including Cables for Liquefied Natural Gas processing

Steel Plates, Angles, and Bars for Liquefied Natural Gas Processing

LNG Related Chemicals

Biogas Digester

Biogas Compressor

De-sulphurization units

Dryer

Distillation columns for processing

biofuels

Bio-ethanol refinery equipment

Fermentation Tanks

Biofuel-related Chemicals, Enzymes and Reagents

Liquefied Petroleum Gas

Compressed Natural Gas

Feed Gas

Automotive gas oil