INTRODUCTION
On 29 April 2020 the Federal Inland Revenue Service (“FIRS”) released its Circular No. 2020/02 (the “circular”) titled “Clarification on the Implementation of the Value Added Tax (“VAT”) Provisions in the Finance Act 2019”. The circular, amongst other things, seeks to clarify the definition of “goods” and “services” in the Finance Act 2019 (the “Finance Act” or the “Act”).
The failure to define “goods” and “services” in the VAT Act hitherto gave rise to dispute between the FIRS and taxpayers as to what constitutes “goods” and “services” for the purpose of VAT in Nigeria. Whilst FIRS insisted that the supply of anything of value was liable to VAT unless expressly exempted under the VAT Act, taxpayers contended that the question whether the thing supplied was either “goods” or “service” was a threshold issue, which ought to be determined before the question of liability to VAT would arise.
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