Basic food items are exempt from VAT but foods sold in restaurants, hotels, eateries, lounges or supplied by contractors, caterers and other similar vendors are liable to VAT. This is according to the new VAT Modification Order issued by the government. pwc.smh.re/0Rnh
The Order clarifies and expands the list of exempt items in the VAT Act including basic food items, baby products, medical products and services. It also introduces new exempt items including road transportation & rent by individuals.
Good news is you won't pay VAT if you buy food from "mama put" or any restaurant with turnover less than N25 million in a year, as such small businesses are exempted from charging VAT on their sales.
Basic food items include honey, bread, cereal, cooking oil, culinary herbs, fish, flour and starch, fruits, meat and poultry, milk, nuts, pulses such as beans, salt, roots such as yam, vegetables and water.
But sugar, cake, ice cream, biscuit, chocolate, juice etc are VATable.
But sugar, cake, ice cream, biscuit, chocolate, juice etc are VATable.
So next time you buy cereal, cooking oil, bread, milk etc from the supermarket, check to make sure you are not being charged VAT.
Bad news is that "large" restaurants, hotels etc are also badly affected by COVID-19. Imposing VAT on food items sold by these entities could make their business recovery more difficult.
Good news is you won't pay VAT if you buy food from "mama put" or any restaurant with turnover less than N25 million in a year, as such small businesses are exempted from charging VAT on their sales.
Basic food items include honey, bread, cereal, cooking oil, culinary herbs, fish, flour and starch, fruits, meat and poultry, milk, nuts, pulses such as beans, salt, roots such as yam, vegetables and water.
But sugar, cake, ice cream, biscuit, chocolate, juice etc are VATable.
But sugar, cake, ice cream, biscuit, chocolate, juice etc are VATable.
