By Jemimah Wellington, JKNewsMedia Correspondent
SEVERAL ESSENTIAL goods and services will no longer attract the 7.5 percent value-added tax (VAT) from January 2026, following the enactment of the Nigeria Tax Act (NTA).
The law, signed by President Bola Tinubu on 26 June, is part of a broader tax reform package that also established a new central tax agency—the Nigeria Revenue Service (NRS).
A total of 15 categories of supplies have been fully exempted from VAT, while an additional 19 have been designated for zero-rated VAT, meaning they will attract VAT at 0 percent.
The exemptions aim to reduce the tax burden on basic consumption items and strategic national services, particularly in health, education, agriculture, and energy.
Among the exempted items are oil and gas exports, crude petroleum and feed gas, humanitarian project supplies, baby products, locally manufactured sanitary products, and assistive devices such as wheelchairs and braille materials.
Also, public interest services like plays by educational institutions, road transport for passengers, and land or building transactions are also excluded.
Furthermore, the zero-rated category covers basic food items, all medical and pharmaceutical products, educational materials, fertilisers, animal feeds, veterinary medicine, and electricity generated and transmitted through national channels.
Services such as tuition across all education levels and medical services are included.
Exported goods (excluding oil and gas), services, and incorporeal property also fall under this classification.
Further adjustments affect the oil and gas sector.
A VAT modification order issued on 2 October 2024, and subsequent tax incentives, eliminated VAT collection on diesel, compressed and liquefied natural gas (CNG and LNG), LPG, electric vehicles, and clean cooking equipment.
These changes reinforce the government’s push for energy diversification and cost-efficient mobility.
The new law allows the finance minister to determine when VAT may be imposed or suspended on listed items, by issuing an official order published in the government gazette.
The Act also grants authority to extend VAT exemptions or zero-rating to additional goods and services as needed.
The Nigeria Tax Act (NTA) is among four pieces of legislation currently enacted under the Tinubu-led administration to strengthen the tax system, improve compliance, and support economic inclusion.
Its implementation is scheduled to begin on 1 January 2026 under the new Nigeria Revenue Service.
