The government has provided a lot of investment incentives designed to promote investment and employment. They are as follows:

Pioneer Status
100 % tax free period for 5 years for pioneer industries that produce products declared as "pioneer products" under the Industrial Development (Income Tax Relief) Act No. 22 of 1971 as amended in 1988.

Local Raw Materials Utilisation –
30 % tax concession for five years to industries that attain minimum local raw materials utilization.

Labour Intensive Mode of production
5 % tax concession for five years. The rate is graduated in such a way that an industry employing 1,000 persons or more will enjoy the 15 % tax concession while an industry employing 100 will enjoy only 6 %, while those employing 200 will enjoy 7 % etc.

Local Value Added
10 % tax concession for five years. This applies essentially to engineering industries, where some finished imported products serve as inputs. The concession is aimed at encouraging local fabrication rather than the mere assembly of completely knocked down parts.

In-Plant Training
2 % tax concession for five years on the cost of facilities provided for training.

Export-oriented Industries
10 % tax concession for five years. This concession will apply to industries
that export not less than 60 % of their products. The emphasis is on the
encouragement at the pre-establishment stage of export-oriented enterprises.

Infrastructure - 20 % of cost of providing basic infrastructure such as
roads water, electricity where they do not exist is tax deductible once and for all.

Investment in Economically Disadvantaged Areas
100 % tax holiday for 7 years, additional 5 % depreciation allowance over and above the initial capital depreciation.

Research and Development
120 % tax deductible expenses provided the research and development is carried out in Nigeria; and 140 % for R and D on local raw materials.

Excise Duty
In order to boost local industries, stimulate trade and reduce cost, government abolished most excise duties with effect from 1st January, 1998.

Re-investment Allowance
This incentive is granted to companies engaged in manufacturing which incur qualifying capital expenditure for the purpose of approved expansion.

Investment Tax Allowance
Under this scheme, a company would enjoy generous tax allowance in respect of qualifying capital expenditure incurred within 5 years from the date of the approval of the project.

Double Taxation Agreements
This is to eliminate double taxation on investment income.

Incentives to Agriculture
Without prejudice to governments commitment to deregulation of the financial sector, banks have been enjoined to recognise differences in the gestation periods within each category of agricultural projects such as Crops, Livestock, Fisheries, Forestry and Wildlife. Banks are enjoined to observe the grace periods on agricultural loans.