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Home Economy

Nigeria Suspends Pioneer Status Applications Ahead of New Tax Incentive Regime

Victoria Attah by Victoria Attah
November 24, 2025
in Economy
Reading Time: 2 mins read
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Shocking Revelation: Nigeria’s Tax-to-GDP Ratio Soars, Unveiling Hidden Revenue.
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The Federal Government has officially closed the window for new applications under the Pioneer Status Incentive (PSI) scheme effective 10 November 2025, marking the end of the long-standing three-to-five-year corporate income tax holiday for qualifying businesses.

The Nigerian Investment Promotion Commission (NIPC), which administers the programme, confirmed that the suspension is in preparation for the launch of the new Economic Development Tax Incentive (EDTI) framework, scheduled to take full effect on 1 January 2026.

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In a statement released over the weekend, NIPC urged companies currently enjoying pioneer status and prospective investors to begin aligning with the incoming EDTI rules to avoid disruptions.

The PSI, introduced decades ago under the Industrial Development (Income Tax Relief) Act, has been a cornerstone incentive for promoting investment in priority sectors such as manufacturing, agriculture, solid minerals, and infrastructure. Eligible firms have historically enjoyed 100% exemption from company income tax for an initial three years, extendable by one or two additional years.

The replacement EDTI scheme shifts the focus from outright tax holidays to a more targeted, performance-linked model. Key features include:

– A 5% annual tax credit on qualifying capital expenditure for five consecutive years, delivering a cumulative 25% relief that is additional to normal capital allowances.
– Strict minimum investment thresholds — for example, at least N200 billion for capital-intensive sectors such as power and utilities.
– Priority emphasis on manufacturing, high-multiplier services, and strategic infrastructure projects that demonstrate clear economic impact.

Government officials say the redesigned incentive is intended to attract larger-scale, job-creating investments while ensuring fiscal sustainability and measurable developmental outcomes.

“The EDTI represents a more modern, transparent, and impact-oriented approach,” an NIPC spokesperson said. “It rewards actual capital deployment in nationally strategic areas rather than granting blanket tax holidays.”

Companies that secured pioneer status before the 10 November cut-off will continue to enjoy their approved benefits until expiry. However, no new applications or extensions under the old regime will be entertained.

Industry groups have welcomed the clarity on the transition timeline but called for detailed guidelines and stakeholder consultations before the January 2026 rollout to smooth the switch for ongoing and planned projects.

With less than six weeks remaining until the new regime begins, investors are being advised to engage early with NIPC to assess eligibility and structure investments in line with the EDTI criteria.

Tags: Tax
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