Under the Nigeria Tax Act 2025 (the landmark legislation active in 2026), the government has significantly expanded the list of VAT-exempt and zero-rated items to lower the cost of living and support key industries.
The law distinguishes between "Exempt" (completely outside the VAT net) and "Zero-Rated" (0% tax, but allows businesses to claim refunds on their costs). For you as a consumer or small business, both effectively mean 0% VAT at the point of sale.
1. Essential Living & Health (0% VAT)
These items are protected to ensure basic survival and wellness remain affordable.
- Basic Food Items: Includes agro and aqua-based staples (e.g., rice, beans, yam, bread, vegetable oil, and locally produced milk).
- Medical & Pharmaceutical Products: All drugs, vaccines, and medicinal herbal products.
- Medical Services: Hospital visits, surgeries, and diagnostic tests.
- Baby Products: Diapers, baby food, and accessories for infants up to 36 months.
- Sanitary Products: Locally manufactured sanitary towels, pads, and tampons.
2. Education & Social Infrastructure
- Educational Materials: Books (physical and electronic) and instructional materials.
- Tuition Fees: Payments for nursery, primary, secondary, and tertiary education.
- Educational Performances: Plays and performances conducted by schools.
- Humanitarian Supplies: Goods purchased for donor-funded humanitarian projects.
3. Energy & Transportation (New 2026 Focus)
The 2025 Act heavily incentivizes clean energy and eases the transport burden.
- Fuel Products: Diesel (AGO), Petrol (PMS), Kerosene (DPK), and LPG (Cooking Gas).
- Renewable Energy: Solar power equipment and gas generators.
- Electric Vehicles (EVs): Electric vehicles and their spare parts are now VAT-exempt to promote "green" transport.
- Public Transport: Shared passenger road transport (non-chartered) like "danfos" or interstate buses.
4. Agriculture & Real Estate
- Agricultural Inputs: Fertilizers, seeds, seedlings, animal feeds, and live animals (cattle, poultry, etc.).
- Farming Equipment: Purchase or lease of tractors, ploughs, and irrigation equipment.
- Real Estate: The sale or lease of land and residential buildings (rent).
- Financial Securities: Money, stocks, and stakes in gaming/lottery (newly clarified in the 2025 Act).
Important: The "Small Company" Exception
If you are buying from a Small Company (Turnover < ₦50 million), they are exempt from charging VAT on any product or service they provide, even if that product isn't on the official list above. This is a massive tax holiday for SMEs in 2026.