The Federal Government of Nigeria has recently issued the Value Added Tax (Modification) Order 2024 (the “Order” or “VMO 2024”), which introduces notable amendments to the VAT Act. The VMO 2024 does not repeal or replace the most recent VMO which was issued in 2021, but only introduces some specific amendments. Please see link here to the VMO 2021, including our previous Tax Alert on the subject.
The modifications in the VMO 2024 are significantly focused on Nigeria’s ongoing efforts around energy transition and largely expands the list of goods and services exempted from VAT under the Act.
Most of the incentives in the Order were previously published in a Circular issued by the Ministry of Finance (MoF) in December 2023. However, there were concerns that the Circular did not have sufficient legal basis, considering that the VAT Act empowers the MoF to make certain amendments through a gazetted Order. The VMO 2024 therefore largely addresses this concern.
One key update in the VMO 2024 is that it removes VAT on AGO (or diesel) effective from 1 October 2023, which is expected to be a welcome development for many businesses.
Please see our tax Alert and the VMO 2024 below:
Download PwC Tax Alert- VAT Modification Order 2024 - Incentivising Energy Transition in Nigeria
Download Value Added Tax Modification Order 2024 Publication