Investing in Industrial Sector


Fiscal measures have been drawn to provide for deductions and allowances in the determination of taxable income of manufacturing enterprises, including:
Pioneer status, which is a concession to pioneer companies located in economically disadvantaged areas, providing a tax holiday period of five to seven years. These industries must be considered by the government, to be beneficial to the country's economy and in the interest of the public.

Companies that are involved in local raw material development; local value added; labour intensive processing; export oriented activities; in-plant training; are also qualified for additional concessions.

Tax Relief for Research and Development (R&D
Up to 120% of expenses on R&D are tax deductible provided that such R&D activities are carried out in Nigeria and are connected with businesses to which allowances are granted. The result of such research could be patented and protected in accordance with internationally accepted industrial property rights.

Local Raw Materials Utilization:
30% tax concession for five years to industries that attain minimum local raw materials utilization as follows: - - agro 80% - agro allied 70% - engineering 65% - chemical 60% - Petro-chemical 70%

Labor intensive mode of production:
15% tax concession for five years. The rate is graduated in such a way that an industry employing one thousand persons or more will enjoy 15% tax concession while an industry employing one hundred will enjoy only 6%, while those employing two hundred will enjoy 7%, and so on.

Local Value Added
10% tax concession for five years. This applies essentially to engineering industries, while some finished imported products serve as inputs. This is aimed at encouraging local fabrication rather than the mere assembly of completely knocked down parts.

In-Plant Training
2% tax concession for five years, of the cost of the facilities for training.

Export Oriented Industries
10% tax concession for five years. This concession will apply to industries that export not less than 6% of their products.

20% of the cost of providing basic infrastructures such as roads, water, electricity, where they do not exist, is tax deductible once and for all.

Investment in Economically Disadvantaged Areas
100% tax holiday for seven years and additional 5% depreciation over and above the initial capital depreciation.

Abolition of excise duty
All excise duties were abolished with effect from the 1st of January, 1999.

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