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  • FG places pharmaceutical products, medical consumables on Zero VAT list

    FG places pharmaceutical products, medical consumables on Zero VAT list

    By Joyce Remi-Babayeju

    In a bid to encourage local production of drugs in the country to relieve the health care needs of Nigerians, the Federal Ministry of Health and Social Welfare has announced the final placing of pharmaceutical products and medical consumables on the Zero VAT Order list, which Wii soon be gazetted.

    According to a press release signed by the ministry’s Head, Information and Public Relations, Mr. Alaba Balogun,this new step ensures that the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service can proceed with the implementation of zero VAT and excise duties on pharmaceutical products and medical devices.

    The move is in line with President Bola Ahmed Tinubu’s Executive Order which opens doors for local pharmaceutical and medical device manufacturers to benefit from the relief measures outlined by Mr. President to ensure a notable reduction in the prices of pharmaceutical products and medical consumables.

    According to the ministry, this development in the health sector aligns with the Ministry’s unwavering commitment to reducing both the physical and financial pain faced by millions of Nigerians who depend on critical health supplies.

    Furthermore, the gazetting of the Harmonized Implementation Framework represents the realization of the third pillar of the Ministry’s 4-point agenda, which focuses on unlocking the healthcare value chain.

    The Zero VAT Order will create an environment that supports local manufacturers, while fostering a healthier, more self-reliant nation, and ensuring that quality healthcare becomes more accessible and affordable for all.

    The gazetted copies of the Harmonized Implementation Framework on Zero VAT will be distributed to the relevant government agencies, including FIRS and Customs for immediate action, the ministry noted.

  • NBS: In 3 Months, FG Earns N1.4trn From VAT, CIT

    NBS: In 3 Months, FG Earns N1.4trn From VAT, CIT

    The National Bureau of Statistics (NBS) has disclosed that the federal government generated N1.435trn from Value Added Tax (VAT) and Company Income Tax (CIT) in the third quarter of 2023.

    NBS, in reports it released, stated that the government made N810bn from CIT and N625bn from VAT.

    It stated that on aggregate, the CIT for Q3 2022 indicated a growth rate of 13.41 per cent on a quarter-on-quarter basis from N714.40 billion in Q2 2022.

    It stated also that sectoral contributions for the top three largest shares during the period were manufacturing with 28.76 (N138.9bn); information and communication with 27.31 (N231.9bn) and financial & insurance with 8.81 per cent (N42.5bn).

    For VAT, it stated the N625.39bn was a growth rate of 4.21 per cent on a quarter-on-quarter basis from N600.1bn. 

    It said local payments recorded were N367.93bn while foreign VAT payments were N121.85bn and import VAT contributed N135.61.

  • FG Earned N2.81trn from VAT, CIT in Nine Months

    FG Earned N2.81trn from VAT, CIT in Nine Months

    The federal government generated over N2.81 trillion from both Value Added Tax (VAT) and Company Income Tax (CIT) in the first three quarters of the year, the National Bureau of Statistics (NBS) has revealed.

    While the sum of N1.14 trillion was recorded for VAT receipts for the period, CIT collections stood at N1.33 trillion.

    VAT collections for the first, second and third quarters of 2021 amounted to N496.39 billion, N512.25 billion and N500.49 billion respectively, indicating marked improvement in collections over the corresponding quarters of 2020 when consumption tax amounted to N1.07 trillion.

    According to the Value Added and Company Income Tax (Q3 2021) report posted on its website yesterday, year-on-year, the VAT upsurge showed growth rates of 52.93 per cent, 56.56 per cent and 17.84 per cent in Q1, Q2, and Q3 2021.

    The improvement in VAT collections further confirmed the resilience and recovery of the Nigerian economy following the devastating impact of the COVID-19 pandemic.

    However, the sectoral distribution of VAT during the review period showed that other manufacturing activity; professional services activity and state ministries and

    parastatals accounted for the top three largest share of revenue in Q1 2021 with N49.41billion or 21.97 per cent, N42.50 billion or 18.90 per cent, and N26.96 billion or 11.99 per cent respectively.

    However, according to the report, non-import VAT (local) was N224.85 billion; non-import (foreign) VAT was N171.66 billion, while NCS-Import VAT stood at N99.88 billion.

    Similarly, in Q2, the other manufacturing activity, professional services activity and commercial and trading activity accounted for the top largest collections with N44.89 billion or 23.95 per cent, N29.30 billon or 15.63 per cent and N21.96 billion or 11.71 per cent respectively.

    Also, non-import VAT, both local and foreign stood at N187.43 billion and N207.69 billion respectively, while NCS-Import VAT stood at N117.13 billion.

    The NBS noted that in the third quarter, the manufacturing activity, information and communication and mining and quarrying accounted for the top three largest share of total

    VAT – amounting to N91.20 billion or 30.87 per cent, N59.25 billion or 20.05 per cent and N28.44 billion or 9.62 per cent respectively.

    On the other hand, CIT collections for the first three quarters amounted to N392.65 billion, N472.07 and N472.52 billion respectively.

    In terms of sectoral distribution, breweries, bottling and beverages , professional services activity and state ministries and parastatals accounted for the top three largest share in Q1 with N23.26 billion or 15.27 per cent, N18.17 billion or 11.93 per cent and N17.35 billion or 11.39 per cent respectively. Also, during the quarter, local CIT amounted N152.33 billion, the foreign component stood at N184.47 billion while other payments totaled N55.85 billion.

    However, in Q2, company taxes from professional services, other manufacturing and banks and financial institutions stood at N130.09 billion (31.14 per cent), N87.27 billion (20.89 per cent) and N60.01 billion (14.36 per cent) respectively.

    Of the aggregate, local and foreign CIT recorded N417.74 billion N51.61 billion respectively while other payments stood at N2.72 billion

    In the same vein, in Q3, manufacturing activity recorded N64.48 billion; information and communication (N58.15 billion) and mining and quarrying (N36.01 billion) as the top three largest share of revenue at 22.08 per cent, 19.91 per cent and 12.33 per cent respectively.

  • MultiChoice heads to court as tribunal strikes out appeal over $342m VAT Dispute

    MultiChoice heads to court as tribunal strikes out appeal over $342m VAT Dispute

    The tax appeal tribunal (TAT) has struck out an appeal instituted by MultiChoice Africa B.V Holdings where it challenged the assessment of the Federal Inland Revenue Service (FIRS) over unpaid value-added tax (VAT) amounting to $342 million.

    MultiChoice Africa is the parent company of MultiChoice Nigeria Limited, owner of DStv and Gotv.

    The VAT allegation is different from the ‘tax evasion’ dispute against MultiChoice Nigeria Limited — which is still at the Lagos tribunal.

    Mohammed Nami, FIRS chairman, had alleged that MultiChoice Africa, which provides services to its Nigerian arm, has never paid VAT.

    Nami had put the figure at $342.5 million.

    “Information currently at the disposal of FIRS has revealed a tax liability for relevant years of assessment for N1.82 trillion and $342.5 million,” he had said.

    The tribunal, while delivering its judgment on Tuesday, upheld the preliminary objection of the FIRS against the appeal of MultiChoice Africa.


    The judgment document sighted by TheCable, A.B Ahmed, chairman of the tribunal, said the appeal is incompetent since the appellant did not conform with the provisions of Order III, Rule 6 of the Tax Appeal Tribunal (Procedure) rules, 2021.

    The rule stipulates that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal.

    In addition to depositing the sum, the appellant is expected to file along with its appeal an affidavit verifying the payment which the company also failed to comply with.

    According to the tribunal, the sum is to be paid as a security for the hearing of any tax appeal.


    “For an appeal against the tax authority, the aggrieved person will pay 50% of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal”.

    In a statement on Wednesday, MultChoice Africa rejected the ruling of the tribunal.

    The company said it would lodge an appeal against the ruling at the Federal High Court, adding that the TAT ruling was based on technicality rather than the merits of the case.

    “MAH respectfully disagrees with the ruling, which was based on a technicality rather than the merits of the case. Therefore, we will be lodging an appeal at the Federal High Court against the ruling,” the statement reads.


    “This tax appeal is a separate and distinct matter from the appeal launched by MultiChoice Nigeria (MCN), in which the TAT found in MCN’s favour last week, allowing it to proceed with that appeal.”

    The FIRS had served a notice of assessment of unpaid VAT to MultiChoice Africa on June 16, 2021, but the company challenged the assessment and filed an appeal at the tribunal.

    It, however, failed to make the required deposit as stipulated by the tribunal rules.

  • VAT Dispute: South-South States To Join Suit At Appeal Court, Say Governors

    VAT Dispute: South-South States To Join Suit At Appeal Court, Say Governors

    Governors of the South-South have resolved that states in the region should join the suit filed by the Federal Inland Revenue Service (FIRS) challenging the collection of Value Added Tax (VAT) by states.

    This formed part of the resolutions reached at the meeting of the South-South Governors’ Forum held on Monday at the Government House in Port Harcourt, the Rivers State capital.

    Delta State Governor and Chairman of the forum, Ifeanyi Okowa, disclosed this while briefing reporters at the end of the closed-door meeting.

    While Rivers was initially the only respondent to the suit pending before the Court of Appeal, authorities in Lagos and Oyo states have already filed applications for joinder in the appellate court.

    Meanwhile, the forum deliberated extensively on regional and national issues and resolved to approve the establishment of a regional security outfit to be launched “very soon”.

    The governors appealed to the National Assembly to immediately review and amend sections of the recently enacted Petroleum Industrial Act.

    They explained that the amendment was necessary to give a clear definition of a host community and transfer the power to appoint the trustees to state governments.

    The forum also called on President Muhammadu Buhari to respect the law establishing the Nigeria Delta Development Commission (NDDC) by appointing a substantive board.

    They demanded that the report of the forensic audit of the agency recently submitted to the President be made public.

    On the management of the nation’s economy, the governors called for the relocation of the headquarters of the Nigerian National Petroleum Corporation (NNPC) and head offices of international oil companies to the states in the Niger Delta region.

    According to them, the request has since been made during a dialogue between stakeholders in the geopolitical zone and a Federal Government delegation led by the Chief of Staff to the President, Professor Ibrahim Gambari.

    Those who attended the meeting include the host, Governor Nyesom Wike, Governor Godwin Obaseki of Edo State, Governor Udom Emmanuel of Akwa Ibom State, and Governor Douye Diri of Bayelsa State.

    However, Cross River State Governor, Ben Ayade, was absent at the meeting.

  • Adamawa, Kaduna, Plateau States Move to Join FIRS in VAT Collection Tussle Suit

    Adamawa, Kaduna, Plateau States Move to Join FIRS in VAT Collection Tussle Suit

    Indications emerged over the weekend that Adamawa, Kaduna and Plateau states had moved to align with the Federal Inland Revenue Service (FIRS) in its appeal against the judgement of a Federal High Court, which barred the agency from collecting Value Added Tax (VAT) in Rivers State. The move came few days after the Court of Appeal joined Lagos State as a respondent in the appeal.

    Justice Stephen Pam, of the Federal High Court in Port Harcourt had in the judgement delivered in August held that the right to collect VAT belonged to the state and not the federal agency.

    The judge, having so held, restrained the service from further collection of VAT in Rivers State and ordered the Rivers State government to assume the duty of VAT collection in Rivers State.

    Consequently, FIRS proceeded to the Court of Appeal for a reversal of the Federal High Court judgement.
    However, hearing in the appeal was delayed due to an application by Lagos State to be joined as a party to the suit.

    But when the case will resume this week, Adamawa, Kaduna and Plateau may likely come up with their individual applications seeking to be joined as parties in the suit.

    A reliable source close to the Attorney General of the Federation (AGF) and governors of the three states, in Abuja, yesterday confirm that they would be filing a leave of the court to be joined in the suit on Tuesday.

    Although the AGF was already a defendant in the appeal, the source hinted that the Federal Ministry of Justice under the AGF had opted to be part of the appellant in the matter so as to enable it argue effectively in support of the FIRS.

    The source said, “They are going to seek to be joined in the suit as co-appellants against the Federal High Court’s judgement that favours Rivers State.

    “These states understand the possible consequences if the final judgrment at the Supreme Court goes against the FIRS. They are going to take the fight as if it is theirs.

    “In fact, their motion papers would be ready by October 4, and will be filed on Tuesday October 5. I can confirm that one to you.”
    The source also hinted that more states, including Kogi and Zamfara, were going to join the suit to form a coalition with the FIRS.

  • VAT: Appeal Court Grants Lagos’ Request To Join Case

    VAT: Appeal Court Grants Lagos’ Request To Join Case

    The Court of Appeal in Abuja has granted a request by the Lagos State Government, seeking to join Rivers State in the appeal filed by the Federal Inland Revenue Service (FIRS).

    The FIRS had filed an appeal at the appellate court to challenge the collection of Value Added Tax by states.

    At the resumed hearing of the matter on Thursday, the court granted the request by Lagos and ordered all processes filed to be served on the Attorney-General of the state, Moyosore Onigbanjo.

    The case was later adjourned to October 7 and would be heard at the Appellate Court in Port Harcourt.

    On September 16, the court reserved its ruling on the application after Onigbanjo, a Senior Advocate of Nigeria (SAN), took his application for joinder in the suit.

    He had informed the panel of judges led by Justice Haruna Tsammani that Lagos was entitled to collect VAT, saying the VAT Act was approved by an order of a court, although it had been annulled.

    According to the attorney-general, states that are recognised by the Constitution to collect VAT and the Federal Inland Revenue Service (FIRS) is aware of that fact.

    He added that the principles for joinder of a party, seeking to be joined, must be a necessary party that has shown that its interest, legally and financially, would be affected.

    While Onigbanjo explained that the case of joinder sought was to prevent multiplicity of action, counsel to the Rivers State government and SAN, Ifedayo Adedipe, supported the application by the Lagos State government.

    But counsel to the FIRS and SAN, Mahmoud Magaji, opposed the application for joinder while relying on Section 243 of the Constitution.

    He stated that the Constitution does not support applications for joinder and Lagos State was not a party to the suit at the trial court.

  • Oyo files application to join Rivers state VAT lawsuit against FIRS

    Oyo files application to join Rivers state VAT lawsuit against FIRS

    Oyo state government has filed an application before a court of Appeal sitting in Port Harcourt, Rivers State, to join a lawsuit instituted by the Rivers State Government against the Attorney-General of the Federation and the Federal Inland Revenue Services in respect to the bid by the state to take over the collection of the Value Added Tax (VAT) from the federal government.

    This was conveyed in a statement released by Mr Taiwo Adisa, the Chief Press Secretary to Governor Seyi Makinde.

    In the suit instituted by the Attorney-General of Oyo State Prof Oyelowo Oyewo, the South-West state sought for an order of the Appellate Court to join the suit as an interested party.

    It read;

    “In the suit, the Government of Oyo State is seeking two orders, viz: an order of the Honourable Court joining the Attorney-General of Oyo State as a respondent on the appeal with suit number FHC/PH/CS/149/2020 and appeal number CA/PH/282/2021 and any other order the Court may deem fit.

    “According to the Attorney-General of Oyo State, the government of Oyo State was unaware of the suit between the Attorney-General of Rivers State and the Federal Inland Revenue Service at the Federal High Court until the judgment was delivered.

    “Other grounds upon which the application was based include that the decision of the appellate court will affect the collection of VAT by the government of Oyo State, being one of the states which the judgment of the lower court recognised as entitled to collect VAT within its territorial jurisdiction.

    “Oyo State Government also indicates that the applicant, Attorney-General of the State, represents the interest of the Oyo State Government, whose interest in the collection of VAT within Oyo State will be impacted one way or another by any judgment delivered by this Honourable Court in this appeal.”

    The Oyo state government justified the application by saying it is one of the 36 states of Nigeria, that would be affected by the decision of the appellate court.

    The statement added;

    “The applicant is a necessary party to this suit being a party who will be bound by the judgment of this Honourable Court in this Appeal.

    “The interests of the applicant and that of the respondent in this case are similar being states within the Federal Republic of Nigeria.”

    It added that joining the state to the suit already instituted by Rivers would help to avoid multiplicity of suits by the states against the Federal Government.

    In a Motion on Notice, also attached to the proceedings already filed before the court, Oyo State said it relied on eight grounds and declared that the state was a necessary party to be joined since it has sufficient interest in the outcome of the appeal.

    The state further argued that after going through its processes, the Appellate Court will find that the application is necessary and that it has sufficient interest in the determination of the appeal as one of the states of the Federation.

    It quoted several legal authorities and concluded thus: “we, therefore, urge the honourable court to resolve the sole issue raised in this application in favour of the applicant and hold that the applicant is a proper, desirable and necessary party to be joined in this appeal.

  • Our Southern Counterparts Confusing VAT With Sales Tax – Northern Governors

    Our Southern Counterparts Confusing VAT With Sales Tax – Northern Governors

    Northern Governors, on Monday, said the position of their Southern counterpart on Value Added Tax (VAT) shows they are confusing it with sales tax.

    Southern governors started pushing for state collection of VAT after a high court in Port Harcourt, Rivers State, held that the state government could collect VAT.

    Rotational presidency unconstitutional – Northern Governors reply Southern counterparts

    The matter is currently before the Supreme Court.

    Arising from an emergency meeting with traditional rulers on Monday, northern governors gave their stand on the VAT controversy.

    “If every State enacted its own VAT Law, multiple taxation will result in increases of prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.”

    “Another confusion is ignoring observation above and its ‘overall effect.’ The reason Lagos accounts for our 50% VAT collection is because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in Lagos, with the resultant and wrongful attribution of VAT.”

    He, however, said as responsible leaders, while the Forum is constrained by the fact that the matter is sub judice, it must, for the sake of educating the public, state that the judgement of the Port Harcourt Court calls to question the constitutionality of “VAT, withholding tax, education tax, Niger Delta Development Commission, National Information Technology Development Agency, 13% derivation, National Economic Development Council and many other currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.”

    He said though Rivers and Lagos State Government had enacted their own VAT laws, unless the Supreme Court pronounces judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice and Northern States Governors Forum would respect this.

  • Continue VAT Collection in all States, Finance Minister Directs FIRS

    Continue VAT Collection in all States, Finance Minister Directs FIRS

    The Minister of Finance, Budget and National Planning, Zainab Ahmed has directed the Federal Inland Revenue Service (FIRS) to continue the collection of value added tax (VAT) and advised all Nigerians to pay their VAT to FIRS until the appellate court rules otherwise.

    The Rivers State Government had last month secured a major court victory over the federal government in the collection of VAT in the state, and had gone ahead, along with Lagos State, to enact necessary laws and agencies for the collection of the tax.

    But the Abuja Division of the Court of Appeal on September 10 ordered all parties that had submitted themselves before the court to maintain status quo ante bellum pending the hearing of an application seeking to stay the judgment of the Federal High Court, Port Harcourt.

    Following the Appeal Court ruling, the Organised Private Sector of Nigeria (OPSN), became confused, and desperately called on the federal government to clear the confusion.

    Apparently in reaction, the Minister of Finance, in a newspaper advertorial on Thursday, stated the position of the federal government on the rulings, directing the FIRS to continue the collection.
    The minister stated: “The tax-paying public has been confused about whom to pay VAT to as a result of the Federal High Court’s judgement in Suit No. FHC/PH/CS/149/2020.

    “The Appeal Court’s ruling, halting the execution of the judgement of the Federal High Court required all parties to maintain the status quo ante bellum. As such, FIRS shall continue to administer VAT in all the states of the federation unless the appellate court rules otherwise.
    “The ruling of the Court of Appeal, therefore, implores all taxpayers in all the states to continue to pay their VAT, and for the FIRS to continue to collect VAT on behalf of the government in compliance with the VAT Act.

    She appealed to all parties to stop their litigations in the interest of the nation, stating that the economy had ominous challenges and needed the support of every Nigerian for it not to go under.
    Ahmed said, “The uncertainty caused by the recent pronouncements of the Federal High Court, sitting in Rivers State and the subsequent enactment of Value Added Tax (VAT) laws by some states is unnecessary and very regrettable.
    “The Nigerian economy, just as the economy of other nations, is facing serious challenges occasioned by the COVID-19 pandemic.”

    According to her, “Government is facing serious revenue challenges and, therefore, this is not the time for litigations, but for all hands to be on deck, to pull through this difficult period.”
    The ruling of the Court of Appeal, she said “has provided the much needed certainty, clarity, and consistency that will enable compliance without disruption to business while final resolution is awaited.”

    She said the federal government “shall continue to update the tax-paying public on this matter as the proceedings unfold at the appellate courts. All businesses are hereby encouraged to continue with their lawful operations.”

    The leaders of the Organised Private Sector of Nigeria (OPSN), had on September 17, spoken in one voice, urging the federal government to make a statement that would clear the VAT confusion.
    They said that the reality and consequences of the controversy “portend grave danger for the business community and by extension, the fragile economic recovery the country had been witnessing in recent times.”

    The OPSN, which is comprised of the Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), and the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigeria Association of Small Scale Industries (NASSI) and the Nigeria Association of Small and Medium Enterprises (NASMEs), said a statement from the federal government would give a clear direction to the business community.

    It said it would also save them the dilemma of remitting their VAT to the wrong government that might necessitate double payment; it would also save them the consequence of paying penalty fees for withholding the remittance of their VAT beyond the due date of Tuesday, September 21, 2021.
    The Chairman of the OPSN, Mr. Taiwo Adeniyi, said: “We want to pay the VAT. But it is for the government at the centre to make a pronouncement because we do not want the situation where we will pay the VAT to the FIRS and the court will later say that it is state governments that shall collect VAT. We are shouting that the government will give us a direction as to what to do. It is not even late as a pronouncement can be made on Tuesday, September 21.

    Adeniyi said that the OPSN was seriously concerned about the consequences of the ongoing controversy over the right of the government to collect VAT in the country, adding that it would be an “aberration to punish businesses or make them suffer from the proverbial ‘two elephants fighting.”
    He said the situation had created an environment of uncertainty, which would negatively affect business competitiveness and sustainability in the country.

    The federal government, through the FIRS by virtue of the Value Added Tax Act of 1993, has been the sole collecting authority of VAT in Nigeria until the Rivers State Government’s court victory, which empowered it to collect VAT from businesses located in the state.