₦airaland Forum

Sirmwill:
No
It would affect the poor more than the rich
Manufacturers, CEOs etc, they would be forced to increase prices of their produced commodities and services, even importers
This would drastically increase prices of things in the coming days

Stop talking the nonsense. All over the world they collect VAT. Government must regulate price inflation, that’s all. Some of the VAT goes to the business, some to government.

seunmsg:
Oh, you’re angry that companies that have not been paying before will now be made to pay? Is that the point you’re trying to make? You’re angry that the new tax law will smoke out tax evaders and bring them to tax net?

Wow! I thought we all wanted a just and equitable Nigeria where everyone pays their fair share of taxes. A Nigeria that works requires equity. How do we build a better Nigeria when citizens think it’s cool for some companies to evade taxes? Do you guys even think at all before you post some of these comments?

Does Nigeria works like the saner clime do you even have benefits like they do watch as corruption eat it all and stories when it comes to accountability.

This tax issue is what will awaken Nigerians. You can’t pay so much in tax just for someone to use the money to develop just their own region. It will never happen.
Time shall tell.

vanbonattel:
What was the compliance rate last year?

I am trying to tell you that she is complaining because she hasn't been paying such last year, and suddenly she is being charged because of the new focus on tax since 2026.

We are not talking about last year which is past.

Every Nigerian has been paying 7.5% VAT on vatable goods since 2020. Me, you, her, everyone of us. It’s either she has not been paying attention to her receipts previously or she’s just being deliberately mischievous. I suspect the later.

And yes, why should you be angry that the law is now being more enforced than before? Is that not the right thing to do? Why should enforcement not be total? Compliance rate for all laws should be total.

morikee:
Does Nigeria works like the saner clime do you even have benefits like they do watch as corruption eat it all and stories when it comes to accountability.

Okay. Let’s just cancel all taxes then. Nobody should pay taxes again. Let your state governor run your state with his family money. Smh.

callmeDDD:
Is this new task collected at the Point of Sale or at the bank transactions? Her receipt is at POS. Trust many firms and shops to adjust their machines illegally for this buhaha and extort customers. The awareness is very poor.

..is at pos

Is this not the same Corper Raye and the smelling Lagos saga? Am I the only one seeing this as clouth chasing?

It's her way of attention seeking
7.5 wey don dey since almost post covid.. people who run transactions in millions understand better.

Exactly correct. We have always paid VAT when we make some categories of purchase. However, people should be careful of exploitation because not everything you buy is VATABLE. There are things you buy that doesn't need VAT payment by you. Many marketers/Sellers would want to take the advantage of the present Tax Reforms to exploit you, please be aware and be alert. I believe this girl VAT isn't supposed to be paid but some people would want to show off and rather scream on the social media to gather more crowd/traffic especially content creator instead of protesting against the exploitation immediately before paying. Companies have charged me VAT severally and I cancelled it by paying the principal amount. Be careful, many companies are out to exploit you based on the new system which of course ain't made to suffer you unjustly.

See below Goods that are exempted from Value Added Tax

Goods Exempt

1. All medical and pharmaceutical products.

2. Basic food items.

3. Books and educational materials.

4. Baby products.

5. Locally produced fertilizer, agricultural and veterinary medicine, farming machinery and farming transportation equipment.

6. All exported goods.

7. Plant and machinery imported for use in the Export Processing Zone.

8. Plant, machinery, and equipment purchased for the utilization of gas in downstream petroleum operations.

9. Tractors, ploughs, agricultural equipment and implements purchased for agricultural purposes.

10. Locally manufactured sanitary towels, pads and tampons.

11. Commercial aircraft, commercial aircraft engines commercial aircraft spare parts.

Services Exempt

1. Medical services;

2. Services rendered by Microfinance Banks, People’s Banks, and Mortgage Institutions;

3. Plays and performances conducted by educational institutions as part of learning; and

4. All exported services.

5. Tuition relating to the nursery, primary, secondary and tertiary education.

6. Airline transportation tickets issued and sold by commercial airlines registered in Nigeria.

7. Hire, rental or lease tractors, ploughs and other agricultural equipment for agricultural purposes.

Practical Implications

There were seven exempted goods and three exempted services at inception. Initially, the trend was to extend the exempted goods and services from time to time ostensibly in response to the lobby from interest groups. However, following the Finance Acts 2019 and 2020, the number of exempt goods was increased to eleven while exempt services were increased to seven. The Finance Act 2019 defined essential food items to include 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, water (natural water and table water). Others included in the Act are locally manufactured sanitary towels, pads or tampons. It also included services rendered by microfinance banks, tuition fees relating to a nursery, primary, secondary and tertiary education.

Disputes have arisen in recent times between the FIRS and taxable persons as to what constitutes the definition or explanation of the items in some categorizations. A very recent case in reference is the one in respect of what the definition of ‘basic food item’ is as the VAT Act in previous times did not provide such answers in terms of explanations or definitions.

This lacuna gave rise to several attempts to define the concept of basic food for a better understanding of the impact and issues on basic food items as used in the VAT Act. For example, an author defined food as any nutritious substance that people or animals eat or drink or that plants absorb to maintain life and growth. Food is also defined as an edible or potable substance (usually of animal or plant origin), consisting of nourishing and nutritive components such as proteins, fats, carbohydrates, vitamins, and essential minerals, which (when ingested and digested) provides growth, generates energy and sustains life. While many foods can be eaten raw, many also undergo some forms of preparation for reasons of flavour, safety, palatability, or texture. This may involve cutting, washing, trimming, or adding other ingredients, such as spices at the simplest state. It may also involve mixing, heating or cooling, pressure cooking, fermentation, or combination with other food.

As a response to the concerns as to what constitutes basic food items, FIRS released an information circular in 2009 on VAT exemption which defined basic food items as follows: “any unprocessed staple food item, whether or not it is packaged.” This, to FIRS, means that for a food item to be exempted from VAT, it must be a staple food item, and it must be unprocessed. What then does “staple food” mean? It is the name given to food that can be easily stored, and eaten throughout the year by a dominant part of a population. Early civilizations usually ate staple foods because they could be stored for an extended period without having to worry about them going bad.

Some examples of staple foods include carbohydrates, wheat, barley, rice, potatoes, tinned food, milk, and things that do not need to be refrigerated. Staple foods are regularly eaten even daily since they supply a significant proportion of nutritional and energy requirements. A staple food, in other words, is a fundamental food item in the typical diet of a group of individuals. Dwelling on the foregoing clarifications, it is apparent that the factors to bear in mind when ascertaining whether a food item is a staple or not is not the level or form of processing the food has undergone; instead, it is the nature of consumption, nutrients formulation, and proportion of the populace that routinely consume the food item.

There were other concerns, especially as relates to the ambiguity in FIRS’ application of the “processed and unprocessed” rule. For example, FIRS included semi-milled or wholly milled rice as part of the recognized VAT exempt food items. However, in another instance, FIRS attempted to assess some companies involved in the production of cassava-based flour to VAT. In a further scenario, FIRS sought to classify this ‘non-special bread commonly referred to as ‘Agege loaf of bread’, preferred by the low-income earning class, as an essential food item while classifying sliced loaf as non-basic, which is typically preferred by the high-income or middle class. Worthy of note, however, is that there is no evidence in the Act to show that the applicability of the VAT Act does not lay any specific emphasis on luxury items or services and goods that the rich or poor in the society consume.

In a FIRS Information Circular released in 1997, the basic food item was later described to include “any unprocessed staple food item, whether or not it is packaged.” However, the Federal High Court Coram Honourable Justice Ibrahim Buba in its 2015 ruling in Lagos in the case between Warm Spring Waters Nigeria Ltd & Ors. v FIRS held that FIRS cannot amend the provisions of a statute by issuing a circular. It also held that water is a basic food item and therefore exempt from VAT regardless of whether it has been processed or packaged. Contrarily, Justice Adamu Hobon had earlier given judgment in a 2004 ruling in the case of Monamer Khod Enterprise v FIRS which was said to have “erroneously focused exclusively on the question whether packaged water was a manufactured good and therefore taxable, rather than on the more relevant inquiry whether water is a basic food item within the meaning of paragraph 2 of Part 1 of Schedule 1 to the VAT Act.” The judgment also was even though FIRS argued bottled water is a luxury good and was not exempted by the VAT Act. This coupled with FIRS’ predisposition that all luxury items should be taxed the VAT was not primarily targeted at the low-income earners in Nigeria. Thus, the two judgments are conflicting, but neither of them aligns with the FIRS Circular’s bid to choose one mode of packaging over another in determining where to apply VAT.

In view of the fact that the content of the FIRS Circular does not bound taxpayers, it goes to show that taxpayers could justify the notion of basic food items using other acceptable means. For example, the dictionary definition of ‘basic’ means ‘fundamental’, and as highlighted earlier, basic food items are fundamental food items in the typical diet of a group of people; often eaten at every meal, and consumed in large quantities.

In the absence of a clear definition of what constitutes a basic food item, the Finance Act 2019 had extended the list of goods and services exempted from VAT and has included clarifications on basic food items to include milk, nuts, bread, cereals, water (natural water and table water), among others. Nonetheless, FIRS is encouraged to further look into its current position and application thereon to enable a more realistic and settled treatment around the concept of basic food items as exceptions to the imposition of VAT, for example, the application of natural and table water in the Finance Act 2019. This will ensure that the target beneficiaries of this exemption are not excluded via a strained interpretation or application of the provisions of the VAT Act.

Medical services are also at the centre of the controversy in Nigeria’s VAT policy. In the case of medical services, the VAT Act or the Federal Inland Revenue Service (FIRS) circulars failed to explain the scope of the term. Recent breakthroughs in the world of medical technology have brought about an increase in cosmetic surgeries and procedures. A general exemption of medical services is no longer sufficient in light of these developments.

Conclusion

While a review has been made on some of the areas shrouded in ambiguity in the Finance Acts 2019 and 2020, this has not completely laid to rest the many controversies surrounding the administration of the tax. With lapses here and there and taxpayers having studied the loopholes inherent in the VAT, legislation has continued to capitalize on these to evade the payment of VAT. The consequence of failure to provide enough clarification and other crucial delimitation is the frequent dissension between FIRS and taxpayers.

This is even worrying because an amendment was made as recent as 2020 with the introduction of the Finance Act. To this end, FIRS and other concerned entities should make efforts to galvanize the views of the numerous stakeholders in the tax practice and administration chain and further make attempts to provide clarity on the subject matter. However, this should not be at the neglect of necessary legislative amendments as ambiguities in tax laws, once identified, are best solved by legislative amendments. In this regard, it is also crucial that taxpayer education and enlightenment as parts of the roles and functions of the Federal Inland Revenue Service should be improved. This should be done by emphasizing the recent amendments such as the introduction of a VAT exemption threshold for businesses with a turnover of less than N25 million per annum and the expansion of the list of VAT exempt items and services to include locally manufactured sanitary towels, pads and tampons as well as tuition relating to the nursery, primary, secondary and tertiary education.


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1 Comment
Reuben Dadar says:
August 25, 2021 at 9:20 pm
Weldon CITN for this. It makes one more updated. Thank you.


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Hallams:
I am surprised that many people believe this is a new tax. Nigerians have always paid Value Added Tax (VAT), and it was during the Buhari administration that the VAT rate was increased to 7.5 percent. As Taiwo Oyedele rightly stated, this is not the introduction of a new tax regime. Unfortunately, it is the so-called influencers who are misrepresenting the facts and attempting to rubbish the entire tax reform conversation.

vanbonattel:
Company income tax has reduced to 25% and everybody who has not been paying will now start paying. That will shoot prices up by at least 40%

Why am I even talking with people who has never ran a business in all their lives.

30k laptop crews should be discussing with civil servants.

You should learn everything, not half way. If your company is not making 100 million and above, you don’t pay tax. Over 90% of SMEs don’t fall above that.

Dogalmighty17:
I don't understand what people mean by influencer. What is an influencer really? Na work?

Go and get some education if you don't know the meaning of influencer! Gooosh!!

alphonsojidebab:
“Tax Don Start” — Influencer Cries Out After Paying ₦487,500 VAT on ₦6.5m Purchase


https://eyesoflagos.com/2026/01/03/tax-don-start-influencer-reacts-vat-6-5m-purchase/

If Tinubu’s TAX monster plan is successful in holding 20 million Lagosians captive since 1999 why change it for 200 million Nigerian mumus?

Lagos tax burden, IGR and budget have increased 100 times but the state is a mess of smelly waterless shithole, because the master strategist steals money that should employ workers to make ordinary water available to every household.



https://www.youtube.com/watch?v=g5v-F81hNTs

Riskymarvelous:
country wey people pay tax enjoying their government buh in Nigeria you can't see what the money use for that is lack of integrity and common sense speaking

The same country where people have not being paying tax?
Is it not when the tax is paid you can ask what the money is used for?

The subsidy was removed.
Are th governors (even those in the opposition) not opening their own mouth to confess that they are getting record sums for allocation?

Why don't you pay the tax first.

You are not even paying tax yet you are complaining
Do you even have a job or business?

You see... This Government doesn't fully realise what they are getting themselves into.
The more tax burden you inflict on the people the more reawakened them become about holding you to account.
There is going to be a day they will come out to ask questions about how their taxes are being spent, that day is when we see things like burning cities, burning Government buildings etc. all hell will break loose except the Government hold themselves to account first and come to equity with the people.

These people have come with theirs propaganda again. Just to trend

Eniitankorede:
You should learn everything, not half way.

If your company is not making 100 million and above, you don’t pay tax. Over 90% of SMEs don’t fall above that.

Where do your SMEs get their products and services from?

Don’t they get anything from the big companies that are taxed

humberjade:
That's the way it should be. We all cry "saner climes, saner climes"...that's the way things are done in saner climes. What is left is for the government to use this generated revenues judiciously.

Stop being naive! These useless politicians will loot everything! You better wake up!

Exousiang01:
The same country where people have not being paying tax?
Is it not when the tax is paid you can ask what the money is used for?

The subsidy was removed.
Are th governors (even those in the opposition) not opening their own mouth to confess that they are getting record sums for allocation?

Why don't you pay the tax first.

You are not even paying tax yet you are complaining
Do you even have a job or business?

Why do you think that someone needs to have a job or busines to pay tax in its different forms, which includes VAT on goods and services as well as levies, rates, fines, fees etc

Moreover, if extreme poverty paupers don’t work for the rich then how will the rich generate income for Tinubu to tax

vanbonattel:
Just listen to yourself!

If she has been paying this high VAT, why is she now crying out loudly?

Some people just support evil because it's done by their people.

VAT has not changed, it the same 7.5%. She would have paid the same amount a year ago.

symbianDON:
Emperor Tinubu the great 👍 we hail thee

The Emperor is raising more money for his reelection and 3rd term agenda to be Nigeria’s first life president, with the support of France like Cameroon’s Biya.

Who will stop the Lagos TAX monster planner, in the way that Atiku led other patriotic Nigerians to stop Obasanjo in 2007, despite his Ghana must go bags of bribes to NASS members




https://www.youtube.com/watch?v=vPytmuhYDAU

vanbonattel:
Just listen to yourself!

If she has been paying this high VAT, why is she now crying out loudly?

Some people just support evil because it's done by their people.

Same false alarm under pretense that Nigerians are known for - She has garnered the attention she is seeking as an influencer - that is their work.

Since when did VAT become a new tax

anonimi:
The Emperor is raising more money for his reelection and 3rd term agenda to be Nigeria’s first life president, with the support of France like Cameroon’s Biya.

Who will stop the Lagos TAX monster planner, in the way that Atiku led other patriotic Nigerians to stop Obasanjo in 2007, despite his Ghana must go bags of bribes to NASS members




https://www.youtube.com/watch?v=vPytmuhYDAU

Anini, you're more learner than this, sometimes, leave propaganda and say the truth. Don't politicizes everything.

dfrost:
What kind of people am I sharing country with?

Learn the difference between CIT, PIT, and VAT. I don't blame influencers, I actually blame people that follow them.

If they charge you VAT, give them your TIN, to credit your account. That way you make proper analysis to the tax man at the end of your FY.

God bless you - you see one thing synonymous with this generation, we have too many ignorant people who parade themselves as knowledgeable people- these ae people who were back-benchers in their school days, people who couldn't understand basic things, lacks comprehension- But have found their voice behind the keyboard where they air idiotic comments and nonsensical contributions.
Engage them on a one vs one discussion, you will understand how ignorant they are.

Hmm

Thank you for addressing the sentimental BS that's everywhere.

seunmsg:
You’re capping nonsense. Is VAT a new tax? If she had made the same purchases last year, would she not have paid the exact same amount as VAT? So, why will any manufacturer increase price in January over a VAT law that has been in effect since the 90’s?

Again, are you aware that with effect from 1st of January, 2026, Company Income Tax has reduced from 30% to 25%? So, will manufacturers whose CIT has been reduced force any price increment on their customers? Does that make any sense? Are you even aware that companies with an annual turnover of < 100m are now fully exempt from CIT? So, why will such companies push any increment to customers?

humberjade:
What is left is for the government to use this generated revenues judiciously.

Thats never going to happen in Nigeria .....

vanbonattel:
Just listen to yourself!

If she has been paying this high VAT, why is she now crying out loudly?

Some people just support evil because it's done by their people.

Use common sense. Vat has been 7.5 all these while.
I'm not seeing new tax in what she posted.
What I see is an olodo girl living large

Fuckingmallam45:
Anini, you're more learner than this, sometimes, leave propaganda and say the truth.

Don't politicizes everything.

If you’re learned and not the one politicising the narrative, you should point out the propaganda that you read in the post you quoted to reply.

Politicising everything like the winchious leaders looters of Oshiomhole’s Assembly of Past Criminals, APC



https://www.youtube.com/watch?v=3eukKEOSi-8

vanbonattel:
Who did you vote in 2023?

That will give us a better ideobon how to advise you.

Pointless talk … travel abroad and don’t pay their tax nah

Nigerian youths will never protest this.

They only know how to make noise without any action.

vanbonattel:
Just listen to yourself!

If she has been paying this high VAT, why is she now crying out loudly?

Some people just support evil because it's done by their people.

Bro, keep calm... if you didn't know, simply talk.

VAT has been 7.5 for a while now. This isn't new. Perhaps, this is the first time she's paying this much, or she's simply doing it for traction on her socials; she's an influencer after all.