A legal appraisal of the impact of tax incentives on investment in Nigeria: the pioneer status perspective

Abstract

To encourage foreign direct investment for the expansion and improvement of the Nigerian economy, the Nigerian government provides tax reliefs or exemptions to qualified multinational investment projects or companies whose income or profits are derived from, brought into, accruing in, or received in Nigeria. Nigeria offers a number of incentives to promote foreign direct investment. The Pioneer Status Incentive is one of the various incentives offered in Nigeria to stimulate foreign direct investment. These incentives are in place to promote investments across a range of economic sectors. The tax incentive programs offered in Nigeria have recently undergone a number of adjustments. Some of these changes were made possible by the Finance Acts (F.A.), which amended several primary tax laws. This paper therefore is an appraisal of the pioneer status incentive on investment in Nigeria viz a viz the recent amendment in the tax laws on this subject. The method of data collection adopted is the doctrinal method using analytical approach to review the various statutes, decided cases, journals and internet materials on the subject. The article will also look at the impact of tax incentives on investment promotion in Nigeria and recommend reforms to increase transparency and a favorable investment climate in Nigeria.