Application of Nigerian Value Added Tax on Services: Judicial Interpretations

Abstract

The study examined the Nigerian Value Added Tax (VAT) on services with the view of unveiling the classification of services under the Value Added Tax Act Cap V1 Laws of Federation of Nigeria 2004 (as amended) and application of VAT on them. The study also looks at the views of the Nigerian Courts and Tax Appeal Tribunal on imported and exported services in Nigeria. The study reviews the progressive nature of “provision of service” and how much the Laws are positioned to cover such services, especially were one party in the transactions is a non-resident. The study takes a peep into the ongoing Finance Bill 2019 currently undergoing Legislative processes before it is passed into Law. After analysing the Nigerian VAT on services and the attendant judicial reaction, the study recommends that VAT laws should not be drafted or construed to give extra-territorial powers to the Law. The study also recommends that the Nigerian VAT Act and relevant tax authorities should focus more on capturing services carried out in Nigeria whether the services are carried out physically in Nigeria or without physical presence but supplied within the Nigerian space (virtual or physical).

Keywords: Taxation, Value Added Tax, VAT

JEL Classification: K34, G18, G28