The Federal Government of Nigeria has confirmed that 149 firms retain tax holidays under new law, ensuring that companies currently benefiting from pioneer status incentives will continue to enjoy tax exemptions for at least two more years despite the country’s shift to a new tax regime beginning January 2026.
The Nigerian Investment Promotion Commission (NIPC) made the disclosure during a media briefing in Abuja on Thursday, noting that the transitional provisions of the new tax framework are designed to protect existing beneficiaries and maintain investor confidence.
FG Confirms 149 Firms Retain Tax Holidays Under New Law
According to data shared by the commission, the Pioneer Status Incentive (PSI) has catalyzed total capital investments of approximately N8.7 trillion since 2017 while generating 58,897 direct jobs, particularly in Lagos State and the manufacturing sector.
The breakdown of PSI administration indicates that out of 693 applications received between 2017 and the second quarter of 2025, 304 were granted, 64 denied, and one certificate cancelled, leaving 149 companies as active beneficiaries. These firms are now guaranteed uninterrupted tax relief for at least the next two years.
Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, stressed that the retention of existing beneficiaries was a deliberate move to prevent disruptions in investment flows and uphold confidence in the country’s economic reforms.
“149 firms retain tax holidays under new law as part of our commitment to ensuring a smooth transition to the new tax regime,” Oyedele stated, adding that the policy safeguards investor interests while aligning with Nigeria’s broader industrial development objectives.
Transition to Economic Development Incentive
The pioneer status, which provides full corporate income tax relief for three years and is extendable by two, will gradually be phased out and replaced by the Economic Development Incentive under the new tax framework.
This tax credit-based system encourages long-term investment, reinvestment of capital, and sector-specific growth.
Under the Economic Development Incentive, companies will continue to pay taxes but can access credits linked to capital expenditure thresholds.
Some firms may enjoy tax reliefs and credits for up to 15 years depending on reinvestment performance, signalling a shift from blanket exemptions to performance-linked incentives.
NIPC officials emphasised that the PSI has historically driven industrial growth by exempting companies engaged in projects that do not already exist in Nigeria.
While the incentives have cost the government an estimated N8 trillion annually in foregone revenue, the benefits in job creation and capital inflows have been significant.
Investment Confidence and Capital Inflows
Speaking at the event, NIPC Executive Secretary Aisha Rimi, represented by Director of Strategic Services Abubakar Yerima, highlighted that the commission facilitated over $10 billion in investment commitments in 2025, demonstrating increased investor confidence in Nigeria’s reform agenda.
Capital importation rose sharply to $5.2 billion in the first quarter of 2025, up from $3.4 billion in the same period of 2024.
Total inflows for the first half of 2025 reached $10.23 billion, driven largely by investments in manufacturing, ICT, agro-processing, renewable energy, and services.
During the second quarter alone, 17 companies were granted pioneer status, mobilising approximately $809.57 million in capital investments and creating over 3,000 direct jobs.
Additional approvals in the third quarter generated more than 2,400 new jobs, reflecting the continued relevance of the pioneer status incentive in boosting employment and industrial activity.
Media Engagement as a Tool for Investor Confidence
The Chairman of the Commerce and Industry Correspondents Association of Nigeria, Ifeanyi Onuba, commended NIPC for deepening media engagement.
He noted that accurate reporting of incentives such as PSI reassures investors and supports the country’s economic growth.
“Ensuring that 149 firms retain tax holidays under new law sends a strong message to investors that Nigeria values continuity and transparency in its investment climate,” Onuba said.
As Nigeria transitions to the Economic Development Incentive system in 2026, the Federal Government has reiterated its commitment to protecting existing investments while promoting sustainable industrial growth.
Analysts suggest that this approach will enhance private sector participation, attract foreign investors, and foster a more resilient economy.
The NIPC continues to support companies through its One-Stop Investment Centre, providing facilitation in company incorporation, expatriate quotas, investor inquiries, and access to fiscal incentives.
With the assurance that 149 firms retain tax holidays under new law, Nigeria positions itself as a competitive destination for investment, balancing fiscal reforms with incentives that encourage industrial expansion and job creation.
