2020 Budget: Food Items Exempted From VAT
In the 2020 Appropriation Bill submitted by President Muhammadu Buhari on Tuesday to a joint session of the National Assembly, 10 food items were exempted from the proposed Value Added Tax regime.
The Federal Government recently increased VAT from five per cent to 7.5 per cent and the next year’s budget is estimated based on the revenue to be generated from the increased VAT.
However, while telling lawmakers about the highlights of the bill which was presented along with an executive bill, the Finance Bill 2019, Buhari said that there were certain exemptions to the VAT regime.
He said, “The VAT Act already exempts pharmaceuticals, educational items, and basic commodities, which exemptions we are expanding under the Finance Bill, 2019.”
Buhari said that section 46 of the Finance Bill, 2019 expanded the exempt items to include the following food items:
1. Brown and white bread;
2. Cereals including maize, rice, wheat, millet, barley and sorghum;
3. Fish of all kinds;
4. Flour and starch meals;
5. Fruits, nuts, pulses and vegetables of various kinds;
6. Roots such as yam, cocoyam, sweet and Irish potatoes;
7. Meat and poultry products including eggs;
9. Salt and herbs of various kinds; and
10. Natural water and table water.