The Value Added Tax (Amendment) Bill, 2020

Jim Roberts & Associates

The Value Added Tax (Amendment) Bill, 2020

  • Proposed amendments on claiming input VAT credits under Section 28 VAT Act, as follows;
  • Proposal to allow VAT registered manufacturers to claim in put VAT incurred on purchases or imports prior to registration for period as far back as twelve months before the date of registration.
  • It is proposed that an owner of more than one commercial building shall account for tax for each commercial building separately and shall not claim tax credits on inputs used in the construction of an incomplete building against the tax collected from a completed commercial building.
  • It is also proposed that a taxable person who is allowed a tax credit on purchase of goods and services from a supplier who is designated to use the e-invoicing system, shall only claim a tax credit on expenses supported by e- invoices or e-receipts.

  • The proposed bill limits offsetting of input VAT credits relating to stock that has been lost due to theft, fire, accident, etc to a maximum of 3 months after which the tax payer shall claim a refund instead.
  • The Bill includes Islamic Development Bank on the list of Public International Organizations under First Schedule to the VAT Act. This implies that this Bank will be entitled to a refund of VAT borne or paid by it as is the case for all Public International Organisations.
  • The proposed amendment exempts the following supplies from VAT: –

  • trailer for agricultural purposes;
  • combine harvesters;
  • supply; of services to conduct a feasibility study and design; the supply of locally produced materials for the construction of a factory or a warehouse and the supply of locally produced raw materials and inputs or machinery or equipment to the manufacture of tyres, footwear, mattress or toothpaste, where the investor meets the qualifying criteria;
  • supply of digital stamps for purposes implementing tax verification, quality and safety system Air craft insurance services;
  • supply of cotton seed cake;
  • the supply of the following imported services—
  • software and equipment installation services to manufactures;
  • services incidental to tele-medical services; and
  • royalties paid in respect of agricultural technologies;
  • the supply of accommodation in tourist hotels and lodges located up-country;

the supply of liquefied gas; (vi) the supply of processed milk. The Stamp Duty (Amendment) Bill, 2020

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