A Compendium of Investment Incentives was recently developed and published by the Nigerian Investment Promotion Commission (NIPC) and Federal Inland Revenue Service (FIRS). The compendium is a compilation of all existing incentives available in different sectors of the economy such as investment policies and protection, taxation and special economic zones.

With the ongoing work by the Nigerian Government to attract investors to Nigeria, the Compendium of Investment Incentives in Nigeria clearly captures investment incentives that local and foreign investors can leverage.

The 22-page report which is divided into the following six sections can be downloaded here:

1. Investment Policies and Protections

This section highlights incentives available under the Nigerian Investment Promotion Commission Act some of which include 100% Ownership of investments, free transferability of funds through an authorized dealer in a freely convertible currency and recourse to international arbitration machinery for the settlement of disputes for foreign investors.

it also highlights incentives available for Bilateral Investment Treaties some of which include elimination of double taxation with respect to taxes on income and capital gains. Commonwealth tax relief for profits earned in Commonwealth countries which are also liable to tax in Nigeria.  

2. General Tax Based Incentives

This section highlights incentives available under the various Tax Acts. They include:

Personal Income Tax Act: Tax credit allowable against tax payable on income derived from outside Nigeria, Consolidated Relief Allowance of N200,000, exemption of several specified incomes from tax.

Capital Gains Tax Act: Exemption on retirement benefits schemes, Tax exemption on gain arising from take-overs, absorption or merger and Double taxation relief.

Companies Income Tax Act: Income tax relief for pioneer industries/products for a period of three years, exemption from tax interest on any loan granted by a bank to specified Companies and rural investment allowance for companies that incur capital expenditure on the provision of facilities such as electricity, water or tarred road for the purpose of a trade or business.

Value Added Tax Act: Exemption of commissions on stock exchange transactions and exemption from value added tax for specific goods and services 

3. Sector Specific Incentives

This section highlights incentives available under the following:

Agriculture/Agro-Allied: Agricultural credit guarantee scheme fund which is a loan guarantee of up to 75% for loans granted by any bank for certain agricultural purposes, exemption for companies carrying out agricultural trade from payment of minimum Corporate Income Tax

Solid Minerals: Exemption for new companies going into the mining of solid minerals from tax for the first three years of their operations.

Manufacturing: 60% Interest drawback program fund for cassava processing

Tourism/Hospitality: 25% of income in convertible currencies exempted from tax 

4. Tariff Based Incentives
This section highlights the percentage of import duties applicable to the Agriculture, Transportation, Manufacturing, Power & Solid minerals Industries

5. Export Processing Zone Incentives

Export expansion grant scheme which provides for a post-shipment incentive designed to improve the competitiveness of Nigerian products and commodities and expand the country’s volume and value of non-oil exports. 

6. Special Economic Zones

This section highlights incentives available for enterprises approved by Nigeria Export Processing Zones Authority (NEPZA) under the NEPZA Act and operating within an approved Zone some of which include: 100% capital allowance for companies that incur expenditure on their qualifying building and plant equipment on an approved manufacturing activity in the Export Processing Zone and unlimited sale of product within the customs territory.

The Compendium is comprehensive and precise and all incentives presented in the compendium are either backed by law or have been gazetted. Download here