TELECOMMUNICATIONS
Government provides non-fiscal incentives to private investors in addition to a tariff structure that ensures that investors recover their investment over a reasonable period of time, bearing in mind the need for differential tariffs between urban and rural areas. Rebate and tax relief are provided for the local manufacture of telecommunications equipment and provision of telecommunication services.
Tax Incentives for Other Lines of Trade
Companies profits in respect of goods exported from Nigeria are exempt from tax provided the proceeds are repatriated to Nigeria and used exclusively for the purchase of raw materials, plants equipment and spare parts.
Profits of companies, whose supplies are exclusively input to the manufacturing of products for exports, are excluded from tax.
All new industrial undertakings including foreign companies and individuals operating in an export processing zone (EPZ), are allowed full tax holidays for three consecutive years.
As a means of encouraging industrial technology, companies and other organizations that engage in research and development activities for commercialization are to enjoy 20% investment tax credit on their qualifying expenditure.
All companies engaged wholly in the fabrication of tools, spare parts and simple machinery for local consumption and export are to enjoy 25% investment tax credit on their qualifying capital expenditure while any tax payer who purchases locally manufactured plants and machinery are similarly entitled to 15% investment tax credit on such fixed assets bought for use.
Export incentives for non-oil Sector
Export proceeds can be retained in foreign currency in a domiciliary account with any authorized bank in Nigeria.A special export development fund has been set up by the government to provide financial assistance to private sector exporting companies to cover a part of their initial expenses in some export promotion activities, including training courses, symposia, seminars and workshops, export market research, advertising and publicity campaigns in foreign markets, trade missions, etc.
There is also an export adjustment fund scheme which serves as supplementary export subsidy to compensate exporters for the high cost of local production arising mainly from infrastructural deficiencies, and other negative factors beyond the control of the exporter.
Finally, Nigerian government established in 1991, an export processing zone (EPZ), which allows interested parties to set up industries and businesses within demarcated zones, with the objective of exporting the goods and services manufactured or produced within the zones.
Calabar in Cross River state has been designated as the primary EPZ territory in Nigeria. Incentives within the territory include, tax holiday relief; unrestricted remittance of profits and dividends earned by foreign investors; no import or export licenses are required; up to 100% foreign ownership of enterprises; sale of up to 25% of production is permitted in domestic market; etc,
All exports under the Nigerian value added tax (vat) system are zero-rated and dividends received from investment in export-oriented businesses are to be free of tax.
Connect With Us
 |  |  |  |
