The Federal Government has announced that 149 companies currently benefiting from the Pioneer Status Incentive (PSI) will retain their tax holidays for at least two more years. This extension remains valid despite Nigeria’s transition to a new tax regime scheduled for January 2026.
The Nigerian Investment Promotion Commission (NIPC) shared this update during a media briefing in Abuja on Thursday. Officials clarified that existing beneficiaries are protected under transitional provisions to ensure economic stability.
Protecting Investor Confidence
The decision to honor existing tax exemptions aims to maintain trust within the business community. Taiwo Oyedele, Chairman of the Presidential Tax Reform Committee, explained that the government will not scrap incentives for firms already granted pioneer status. Instead, the transition will be gradual to protect ongoing investments.
Key Statistics of the Pioneer Status Incentive (2017–2025):
- Total Investment: Approximately N8.7 trillion in capital attracted.
- Job Creation: Over 58,800 direct jobs generated, primarily in manufacturing.
- Approval Rate: Out of 693 applications, 304 were granted and 64 were denied.
- Current Reach: 149 firms are active beneficiaries as of late 2025.
The Shift to a Credit-Based System
While the current PSI provides full relief from corporate income tax for up to five years, it will eventually be replaced. The new framework introduces the Economic Development Incentive (EDI).
Under the EDI, the system shifts from total tax waivers to a tax credit-based model.
- Tax Payments: Companies will begin paying taxes upfront.
- Earned Credits: Firms will receive credits based on their capital expenditure and reinvestment.
- Long-term Benefits: Some companies may enjoy these credits for up to 15 years, depending on their performance and sector-specific growth.
Rising Investment Inflows in 2025
Despite the looming policy changes, investor interest in Nigeria remains strong. NIPC Executive Secretary Aisha Rimi reported that the commission facilitated over $10 billion in investment commitments in 2025.
Furthermore, capital importation saw a sharp rise. In the first quarter of 2025, inflows reached $5.2 billion, up from $3.4 billion in the same period of 2024. These investments are concentrated in high-growth sectors, including:
- Information Technology (ICT)
- Agro-processing
- Renewable Energy
- Manufacturing and Services
By maintaining these tax holidays, the government intends to foster a smooth transition while stimulating industrial growth across the federation.
Coty Exits Hair Care: Sells Final Wella Stake to KKR for $750M
