Yes, this is a major improvement. Businesses can now recover input VAT on a much wider range of expenses, including services and capital assets. Previously, recovery was largely restricted to goods used for manufacturing.
- Scenario: A hotel purchases new furniture for ₦20 million and pays ₦1.5 million in VAT. Because the hotel charges VAT on its room rates, it can now reclaim that full ₦1.5 million in input VAT, reducing its overall cost.
