The Nigerian Investment Promotion Commission (“NIPC”) in partnership with the Federal Inland Revenue Service (“FIRS”) has, on Friday, 3 November 2017, issued the first edition of a compendium of tax and sector-wide fiscal incentives (the “Compendium”). The Compendium is intended to clearly set out existing incentives available to both foreign and domestic investors in order to promote awareness about the investment opportunities in Nigeria. The Compendium is based on the Fiscal Policy issued by the Federal Government in 2016 and cuts across five major sectors of the economy, namely solid minerals, manufacturing, tourism and hospitality and oil and gas.
The available incentives set out in the Compendium are as follows:
- Investment policies and protections for foreign investors: which covers, amongst others, the freedom to invest and have free transferability of capital and returns; protection against nationalization; recourse to international arbitration and bilateral investment treaties.
- General tax based incentives: which covers, amongst others, wide ranging tax reliefs and allowances, as well as pioneer status, VAT exemptions and exemptions on proceeds of disposal of government and corporate securities.
- Sector specific in incentives: which covers incentives available to investors the five key industries.
- Tariff based incentives: which addresses import duty exemptions available on imports related to certain sectors of the economy such as agriculture and manufacturing.
- Export incentives: which relates to the export expansion grant scheme available to exporters in Nigeria.
- Specialised economic zones: which sets out the incentives available to entities established within export processing zones and oil and gas free zones.
The Compendium is a product of the NIPC’s partnership with several government agencies and is a useful compilation of the existing investment incentives available to investors in Nigeria.
The Compendium will be updated periodically as additional incentives are enacted into law. The NIPC and FIRS are also committed to building in improvements in the scope and depth of future editions of the Compendium, which may cover more sectors of the economy. The Compendium demonstrates the Federal Government’s ongoing commitment to improving the ease of doing business in Nigeria.
A copy of the Compendium is available here.