Federal Government has introduced a bill seeking to exempt a range of essential products and services from Value Added Tax (VAT) as part of its efforts to ease the financial burden on manufacturers and end users.

The bill, titled, ?A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions and Instruments and Related Matters,? has on its VAT exemption list, baby products, locally manufactured sanitary towels, pads and tampons, aimed at making the items more accessible and affordable.

The bill extends exemptions to other categories, including military hardware, arms, ammunition and locally-manufactured uniforms supplied to the armed forces, paramilitary and other security agencies.

?The following supplies are exempted from the Value Added Tax imposed under chapter six of this Act: oil and gas exports; crude petroleum oil and feed gas; goods purchased for use in humanitarian donor-funded projects provided that the humanitarian donor shall first pay the VAT and request a refund from the service.?

The bill further exempts shared passenger road transport services from VAT, likely to mitigate transportation costs for the public.In the agricultural sector, the bill provides VAT relief for the purchase, hire, or lease of equipment such as tractors and ploughs, as long as they are used for agricultural purposes.

Diplomatic and educational activities also received consideration in the proposed law. Goods or services supplied to diplomatic missions, diplomats and entities operating under the Diplomatic Immunities and Privileges Act are listed as exempt, provided the activities are not for profit.

Similarly, plays and performances conducted by educational institutions as part of the learning process are included in the VAT exemption. Other items highlighted for exemption were government licences, land or buildings, and financial instruments, such as money or securities, including interests on the instruments.

The bill also noted that supplies consumed within export processing or free trade zones would not attract VAT, provided they were used for approved activities.

It emphasised that VAT would only be collected on the items if the minister, by an order published in an official gazette, specified a date for the imposition of VAT on any of the exempted items. (The Guardian)

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