Sectoral Incentives

(i) INDUSTRY

(a) Companies with turnover of less than N1 million are taxed at a low rate of 20% for the first five years of operation if they are in the manufacturing business.

(b) Dividend from companies in manufacturing sector with turnover of less than N1 million is tax-free for the first five years of their operation.

(c) Dividends derived from manufacturing companies in petrol chemical and liquefied natural gas sub-sector are exempted from tax.

(ii) AGRICULTURE

(a) Companies in the agro-allied business do not have their capital allowance restricted. It is granted in full i.e. 100%.

(b) The payments of minimum tax by companies that make small or no profits at all do not apply to agro-allied business.

(c) Agro-allied plant and equipment enjoy enhanced capital allowances of up to 50%.

(d) Processing of agricultural produce is a pioneer industry; consequently, there is 100% tax-free period for 5 years or projects into processing of agricultural produce.

(e) Agricultural and Agro allied Machinery:
All agricultural and agro-industrial machines and equipment to enjoy 1% duty.

(f) Agricultural Credit Guarantee Scheme Fund (ACGSF) administered by the Central Bank of Nigeria:
Up to 75% guarantee for all loans granted by commercial banks for agricultural production and processing.

(g) Interest Drawback Program Fund:
60% repayment of interest paid by those who borrow from banks under the ACGS, for the purpose of cassava production and processing provided such borrowers repay their loans on schedule.

(iii) SOLID MINERALS

The following incentives are available in the solid minerals sector:

(a) 3 to 5 years tax holiday;

(b) Low income tax of between 20% and 30%;

(c) Deferred royalty payments depending on the magnitude of the investment and the strategic nature of the project;

(d) Possible capitalization of expenditure on exploration and surveys;

(e) Extension of infrastructure such as roads and electricity to mining sites;

(f) The holder of a mining lease shall, where qualified, be entitled to:

i) Depreciation or capital allowance of 75% of the certified true capital expenditure incurred in the year of investment and 50% in subsequent years
ii) Investment allowance of 5%
iii) Exemption from payment of customs & import duties
iv) Expatriate quota & resident permit for approved expatriate personnel

(g) In addition to roll-over relief under the capital gains tax (CGT), companies replacing their plants and machinery are to enjoy a once-and-for-all 95% capital allowance in the first year with 5% retention value until the assets is disposed, 15% will be granted for replacement of an asset.

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