Adefolake Adewusi, Florence Bola-Balogun and Tolulope Ogidi of ǼLEX review a recent decision of the Nigerian Court of Appeal on whether VAT should be payable on satellite bandwidth, and consider some legal issues which arise from the Court’s reasoning.
The Court of Appeal in Nigeria recently upheld the decision of the Federal High Court (FHC) in Vodacom v Federal Inland Revenue Service to the effect that Vodacom Business Nigeria Limited (Vodacom), a Nigerian entity, had the responsibility to ensure that value-added tax (VAT) was charged and remitted on the value of its contract with a nonresident company. The contract was for the transmission of radio signals (‘‘bandwidth capacities’’). The Nigerian Federal Inland Revenue Service (FIRS) regarded this transmission as a supply of service for which VAT should be imposed.
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