Nigeria: VAT amendments, revised definitions intended to provide relief for certain sectors

Amendments to the value added tax (VAT) law in Nigeria

Amendments to the value added tax (VAT) law in Nigeria

Amendments to the value added tax (VAT) law in Nigeria introduces new definitions, and revised definitions, for some of the terms in the “First Schedule” to the VAT law. The update also expands the list of exempt goods and services with their relevant common external tariff (CET) code to provide additional relief to qualifying taxpayers.

The changes generally are pursuant to the “Value Added Tax (Modification) Order, 2021” as published in the official gazette on 21 September 2021.  

Industries or sectors that may be affected by the update include: 

  • Financial services industry
  • Energy sector
    • Modification of the definition of “petroleum products”
    • Exemption of gas supplied within the power sector
    • Exclusion of previously exempt items—natural gas, imported liquefied petroleum gases, and other gaseous hydrocarbons
    • Exempt renewable energy equipment
  • Consumer and industrial markets, infrastructure and agriculture sectors
    • Consumer and industrial manufacturing sector
    • Agriculture sector
    • Transportation sector

KPMG observation

There are some amendments that may require further revision to provide consistency with the VAT law and other tax laws and policies. For instance, the “VAT Rate of Tax Chargeable Order, 2007” amended item 6 of Part I and Item 4 of Part II of the First Schedule to the VAT law by excluding “non-oil exports which enjoy zero rated status” from VAT-exempt status. Therefore, the deletion of non-oil exports from zero-rated goods—without a concurrent amendment of items 6 and 4 of Parts I and II, to delete the words “excluding non-oil exports which enjoy zero rated status” could be misinterpreted to mean that non-oil exports are now not allowed a VAT exemption. Observers believe this cannot be the intention of the recent guidance because it contradicts the government’s export expansion policies and the intention to drive economic growth through fiscal incentives that in turn encourage increased export capacity.

Read a November 2021 report [PDF 819 KB] prepared by the KPMG member firm in Nigeria


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.