Value Added Tax (VAT) is a consumption tax imposed on the value
of the supply of taxable goods and services produced and consumed
in Nigeria. The statutory framework for the imposition of the tax
is the Value Added Tax Act Cap V1, Laws of the Federation of
Nigeria, 2007 (as amended). The applicable rate is 5%. However,
there are exceptions to the application of VAT under the
legislation. One of these exceptions is basic food items.
While the VAT Act lists basic food items as an exempt item, the
term was not defined in the VAT Act. However, Federal Inland
Revenue Service (FIRS), in exercising its function of enlightening
the public, published an information Circular No 9701 (the
Circular) on VAT exemption. This Circular defined basic food items
as "any unprocessed staple food item, whether or not it is
packaged". This definition is ambiguous and has resulted in a
lot of controversies. Based on the above definition and in the
opinion of FIRS, for a food item to be
