VAT MODIFICATION ORDER

What Is This Policy?

The Finance Act (Effective Date Variation) Order 2023 is a presidential executive order signed by President Bola Tinubu on July 6, 2023, that extended the commencement date of the Finance Act 2023 from May 1, 2023 to September 1, 2023, allowing taxpayers a full 90-day adjustment period in line with the National Tax Policy. It also suspended new excise duties and import levies pending further review, and introduced targeted Value Added Tax amendments affecting withholding VAT remittance timelines and the definition of taxable goods.

Who Does It Target?

All corporate taxpayers, including manufacturers, service companies, banks, and oil and gas operators FIRS-appointed VAT withholding and collection agents: government agencies, large companies, and financial institutions designated to deduct VAT at source Telecommunications companies, importers, digital services providers, and hotel operators affected by specific Finance Act 2023 provisions Tax practitioners, accountants, and compliance officers managing corporate tax obligations

What Does It Aim to Achieve?

Ensure taxpayers have adequate time to update their systems, processes, and compliance procedures before new tax provisions take effect Honour the National Tax Policy's 90-day notice requirement for changes in tax law, giving businesses legal certainty Suspend unpopular excise duties and import levies that could have increased costs for consumers and industries before further stakeholder consultation Provide clarity on the implementation sequence for all 11 key statutory amendments contained in the Finance Act 2023

Key Features

Effective Date Extension: Finance Act 2023 provisions took effect from September 1, 2023, not May 1, 2023 as originally stated; giving businesses an additional four-month window VAT Withholding Timeline: FIRS-appointed VAT collection agents must remit withheld VAT to FIRS on or before the 14th of the following month, replacing the previous 21st-day deadline Expanded VAT Scope: Buildings no longer include removable structures such as mobile homes, cell towers, and transmission masts; these items are now subject to VAT at 7.5% Tertiary Education Tax Increase: TET rate increased from 2.5% to 3% of assessable company profits, effective for accounting periods ending on or after September 1, 2023 Digital Asset CGT: Gains from disposal of digital assets (crypto, tokens) now subject to 10% Capital Gains Tax; FIRS to issue implementation guidance Excise Suspension: 5% excise duty on telecoms services and newly introduced green tax on single-use plastics suspended pending further presidential orders

Current Status

Rollout Stage: Active; all Finance Act 2023 provisions effective from September 1, 2023; FIRS has issued multiple public notices and circulars clarifying implementation Implementing Body: Federal Inland Revenue Service (FIRS); Nigeria Customs Service; Federal Ministry of Finance Compliance: Companies should have updated their VAT remittance cycles, invoice formats for newly taxable items, and TET computations from Q3 2023 Upcoming: The Tax Reform Acts 2024 (NITDA, NRS, NJTS Acts) are in the pipeline; taxpayers should monitor for further amendments to the VAT framework

How to Access

Taxpayers: Download FIRS public notices and tax alerts from firs.gov.ng for the complete implementation schedule and guidance notes VAT Agents: Ensure your accounting systems reflect the 14th-of-month VAT remittance deadline; contact FIRS TIN helpdesk for VAT agent registration queries Tax Practitioners: Access detailed guidance from KPMG, PwC, EY, and Deloitte Nigeria's Finance Act 2023 publications for client advisory purposes Contact: FIRS: firs.gov.ng | 15 Sokode Crescent, Wuse Zone 5, Abuja | 0800 1000 3477 (toll-free)

Important Terms

14th Day Deadline: VAT collected from clients in August must reach FIRS by September 14; failure attracts interest at 21% per annum plus a penalty of N50,000 90-Day Tax Policy: The National Tax Policy prohibits new tax legislation from taking effect with less than 90 days' notice; the Effective Date Order gives effect to this principle

Official Resources

Website: firs.gov.ng Contact: FIRS, Revenue House, 15 Sokode Crescent, Wuse Zone 5, Abuja | Helpline: 0800 1000 3477 Policy Summary | Source: FIRS, KPMG Nigeria, PwC Nigeria, Forvis Mazars Nigeria, Mondaq Nigeria, EY Nigeria | February 2026

Legal Framework

Issued under the executive powers of the President vested by Section 5 of the 1999 Constitution (as amended). The Finance Act 2023 is the principal underlying statute whose commencement date was varied. Operates under the Federal Inland Revenue Service (Establishment) Act, the Companies Income Tax Act (CITA), and the Value Added Tax Act. The order aligns with the presidential power to vary effective dates under enabling provisions of the Finance Act.