Investor Presentaiton
The Country and its
institutions
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial
Services Industry
Tax System
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods Exportation of Goods
COVID-19 Economic
and Fiscal Measures
7.5.4
7.5.5
Road Infrastructure Development and Refurbishment Investment Tax
Credit Scheme59
The Federal Government on 25 January 2019 established a ten-year Road
Infrastructure Development and Refurbishment Investment Tax Credit
Scheme ("the Scheme"). The Scheme was set-up as a public-private
intervention that enables the Federal Government to leverage private sector
capital and efficiency for the construction, refurbishment and maintenance
of critical road infrastructure in key economic areas in Nigeria.
Participants under the Scheme will be entitled to utilize the project cost
incurred in the construction or refurbishment of an eligible road as a tax
credit against their income tax liability, until full cost recovery is achieved.
The Scheme also provides an incentive to participants by granting a single
non-taxable uplift on project cost. The uplift, which is a percentage of the
project cost (MPR+2%), will be included in the total tax credit available to
each participant.
Other Tax Incentives
•
•
•
•
Dividends distributed by unit trusts 60 are tax-exempt in the hands of the
unit holders;
Exemption of small companies from CIT;
Agricultural companies are entitled to initial tax-free period of five years,
subject to further extension for three years;
Dividend and rental income received by a REIC are tax-exempt provided
that 75% of the received income is distributed within 12 months of the
end of the financial year in which they were earned
Accelerated capital allowance of 95% in the first year in respect of
replacement of industrial plant and machinery.
Tax-free interest on loans to companies engaged in agricultural trade
or business, or the fabrication of local plant and machinery, provided
that the moratorium is not less than 18 months and the interest rate of
the loan at the time it is granted is not higher than the prevailing base
lending rate;
Interest payable on foreign loans granted to Nigerian companies (in
any industry) may be partially exempted from tax, where the loan
arrangement meets the prescribed criteria;
•
Interest earned on foreign currency domiciliary account in Nigeria is fully
exempted from tax;
• 5-year tax holiday for companies involved in the mining of solid minerals;
Exemption of stocks, shares and Nigerian government securities61 from
CGT;
•
•
Investment (dividend, rent, interest and royalty) income derived by
the beneficiary from outside Nigeria and brought into Nigeria through
government-approved channels are tax-exempt;
. Companies engaged in research and development activities for
commercialisation are entitled to 20% investment tax credit on their
qualifying capital expenditure; and
•
Withholding tax on dividend, interest, rent and royalty due to residents
from a DTA country is 7.5% (subject to satisfaction of the conditions
specified in the DTA).
1040-SR res
Head of
T
AX
59 https://assets.kpmg/content/dam/kpmg/ng/pdf/tax/Road-Infrastructure-Development.pdf
60 In accordance with the provisions of Finance Act, 2019, dividends distributed by unit trusts are exempt from withholding tax.
KPMG
61 "Nigerian government securities" is defined to include Nigerian treasury bonds, savings certificates and premium bonds issued under the
Savings Bonds and Certificates Act.
Investment in Nigeria Guide - 8th Edition
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