Businesses holding approved tax incentives under repealed laws will keep those benefits until they expire, the Federal Government confirmed this week. Officials released transition guidelines for the Tax Acts 2025 to clarify the matter.
Companies already enjoying tax exemptions and incentives can maintain them through their original expiration dates. However, new applications will be evaluated under the fresh tax framework.
Ruth Chukwu, an associate at G. Elias, welcomed the clarity.
"The transition guidelines have added a layer of administrative clarity for taxpayers, revenue authorities, and practitioners across the board," she told reporters.
According to Chukwu, existing incentives granted under old laws stay valid until they lapse. New and pending requests will face assessment under the Tax Acts 2025 instead.
The move addresses investor concerns about losing benefits before approved terms end. Many businesses had structured deals based on existing incentive schemes.
Tobiloba Adeboye, a chartered accountant and tax professional, described it as timely. He noted that the arrangement helps firms plan compliance with less regulatory uncertainty.
Nigeria's 2021 Tax Expenditure Statement pegged foregone revenue from tax breaks at about N6.8 trillion. That represented roughly 4 percent of gross domestic product back then.
Recent government figures tell a different story. Officials cited annual tax waivers worth about N6 trillion in 2024, climbing to as much as N8 trillion in 2025.
Nigeria is shifting from the Pioneer Status Incentive regime to a new Economic Development Incentive framework. The change came through the Nigeria Tax Act 2025.
EY analysts explained the transition represents a major pivot. It moves away from blanket income tax holidays toward performance-based incentives tied to real capital investment.
Businesses currently on PSI relief must reassess their standing under new rules. They'll need to review eligibility, project economics, and compliance obligations.
EY noted that tax authorities stressed the importance of transition safeguards. Officials wanted certainty for existing beneficiaries while implementing the new system.
The Pioneer Status Incentive scheme remains central to this debate. Nigeria's Investment Promotion Commission administers the program.
NIPC data shows 693 applications arrived between 2017 and mid-2025. Of those, 304 earned approval, with 149 companies still active as transitional beneficiaries.
The scheme has drawn approximately N8.7 trillion in investment pledges so far. It's also supported nearly 59,000 direct jobs across the economy.
