To make the business environment attractive to investors, the Federal Government has put in place, an array of incentives. They include various forms of tax relief, such as the Pioneer Status, the Export Expansion Grant [EEG], capital allowances, graduated tax concessions for labor-intensive modes of production [the larger the labor force, the higher the tax concession], and a tax credit of 20% for five years to industries that attain the minimum level of local raw material sourcing and utilization. To qualify for the tax credit, the minimum levels of local materials sourcing and utilization by sectors are: agro-allied 70%, engineering 60%, chemicals 60%, and petrochemicals 70%.
INVESTMENT INCENTIVES
Investment in Yobe State offers access to various attractive incentives from both the Federal and the State governments. Investors can take advantage of import concessions, tax exemption for exported products, tax reductions for qualifying companies (i.e., pioneer companies, manufacturing companies), and tax deductions for research and development expenses.
National Incentives
- Pioneer Status Tax Holiday
- Tax relief for Research and Development
- Capital allowances.
- Unconditional transferability of funds.
- Remittance of proceeds [net of all taxes] in the event of the sale or liquidation of the enterprise.
- Total repatriation of capital should the investor choose to relocate elsewhere.
- Investment Protection Assurance.
- Investment Promotion and Protection Agreements IPPA.
PIONEER STATUS
Pioneer status is a profit and dividends tax holiday of up to five years granted to designated pioneer industries. There are currently 69 designated pioneer industries within the agriculture, mining, manufacturing, tourism, property development, and utility sectors. A minimum capital investment of N5 million from a foreign-owned company [150,000 for a national company] is required to qualify for pioneer status.
EXPORT EXPANSION GRANT SCHEME [EEG]
The Export Expansion Grant scheme is an incentive to investors for the stimulation of non-oil exports, such as cotton, leather, and cocoa.
To be eligible an exporter must:
- Register with the Nigerian Export Promotion Council [NEPC]
- Be a manufacturer producer or merchant of products of Nigerian origin for the export market [i.e., the products must be made in Nigeria].
- Have a minimum annual export turnover of N5 million and evidence of repatriation of proceeds of exports.
- Submit baseline data which includes audited Financial Statements and information on the operational capacity to Nigerian Export Promotion Council.
NOTE:
EXPORT CERTIFICATE is required on each consignment for all categories of export whether or not an exporter is eligible for the Export Expansion Grant. The certificate is obtainable from NEPC offices throughout the Federation free of charge, upon the submission of the pre-shipment documents.
DOUBLE DIPPING into government industrial incentives will not be allowed. [i.e., beneficiaries of EEG are prohibited from enjoying other industrial incentives e.g., Manufacturers Export in bond Scheme].
Detailed Guidelines for the operation of the EEG can be obtained from the Federal Ministry of Finance of Federal Ministry of Trade and Investment Abuja or the State Ministry of Industry, Trade, and Investment.