Value Added Tax (Modification) Order 2020 in Nigeria

When a person supplies taxable goods and services, the value added tax rate in Nigeria is 7.5% except for zero-rated and exempt items. The Finance Act 2019 contains changes to several provisions of the VAT Act, including exempt items in the First Schedule. Effective 3 February 2020, the Finance Minister has issued the Value Added Tax (Modification) Order 2020 for better clarity on the exempt items. The Value Added Tax (Modification) Order 2020  provides details on the goods and services exempt from VAT as well as the Common External Tariff code.

Goods exempt from Value Added Tax

  1.  Basic food items are agro and aqua-based staple food such as:
  • Raw or semi-processed honey
  • Bread
  • Cereals in grain, flour, crop
  • whether in bulk or retail
  • Cooking oils
  • Culinary herbs for human consumption
  • All kinds of fish whether live, fresh, frozen, smoked or dried except ornamental
  • Bleached or unbleached flour and Starch that is suitable for culinary purposes
  • Fresh or dried fruits
  • Live or raw meat and poultry products
  • Fresh, liquid and powdered milk
  • Nuts such as groundnut, walnut, cashew nut
  • Raw and unprocessed pulses such as beans and lentils
  • Raw and unprocessed roots such as yam, cocoyam
  • Fine salt for culinary use in retails packs except for industrial salt.
  • Fresh, dried, or ground vegetables such as melons and okra
  • All table water other than sparkling or flavored water. It also excludes water sold in restaurants or by contractors.

2.   Baby products made for babies from the day of birth to 36 months of age such as

  • Activity and entertainment products
  • Bath care products etc.
  • Carriage and parts
  • Garments and clothing of any material
  • Feeding products and other baby monitor accessories
  • Sanitary wares and raw materials for the production of baby diapers and sanitary towels

3.   Plant, machinery and equipment purchased for utilization of gas in downstream operations. Downstream gas utilization refers to a power plant, liquefied natural gas, gas to liquid plant, fertilizer plant, gas transmission, and distribution pipelines.

4.   Educational books include electronic and paper-back books that aid learning activities in educational institutions as well as religious, vocation, science, and technical education.

5.   Educational materials are supplies used for instructional learning and assessment

6.   Farming machinery, implements, farming transportation equipment used exclusively for farming or agricultural purposes.

7.   Fertilizers such as drugs and vaccines produced in Nigeria for agricultural and veterinary purposes.

8.   Locally produced animal feeds

9.   Medical and pharmaceutical products

10.  Medical equipment

11.   Renewable energy equipment

12.   Petroleum products such as aviation, motor spirit, kerosene, natural gas, other liquefied petroleum gases and gaseous hydrocarbons.


Services exempt

  • Medical services by a certified health expert to human and animals

  • Where a person leases or rents a residential accommodation

  • Public road transportation service
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