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Tax Incentives for Startups in Nigeria
Having a great business idea is not enough to build a successful business. Nigeria has various tax incentives to drive investment in key sectors of the economy. Below are tax incentives you can take advantage of;
Having a great business idea is not enough to build a successful business. Nigeria has various tax incentives to drive investment in key sectors of the economy. Below are tax incentives you can take advantage of;
1. Investment allowance- Companies that invest (that is acquires) in plant and equipment enjoys 10% of the cost of the asset as investment allowance which can be deducted from their assessable profit before calculating the tax payable.
2. Interest incentive- Interest earned on domiciliary accounts is tax exempt.
3. Minimum tax-Companies that specializes in agricultural produces or have more than 25% foreign equity or are within the first four years of business are exempted from paying minimum tax. That means
3. Minimum tax-Companies that specializes in agricultural produces or have more than 25% foreign equity or are within the first four years of business are exempted from paying minimum tax. That means
it is possible to operate a business in Nigeria and not pay corporate income tax.
4. Full relief of capital allowance- Relief of capital allowance is restricted to 2/3 of assessable profit for all companies except those in the agricultural, mining and manufacturing sectors.
4. Full relief of capital allowance- Relief of capital allowance is restricted to 2/3 of assessable profit for all companies except those in the agricultural, mining and manufacturing sectors.
5. Pioneer Status- Companies investing in specified industrial activities may, on application, be granted a tax holiday for initial three years and could be extended for up to two years upon satisfaction of specified conditions.
6. Mining of Solid Minerals- A new company that engages in the mining of solid minerals is exempt from tax for the first three years of its operation.
7. Rural Investment incentive- certain incentives are available to companies that incurs capital expenditures on provisions of facilities such as electricity, water or tarred road in locations which are at least 20 kilometers away from such provided by the government.
