Nigeria to Retain Pioneer Status Tax Holidays for 149 Companies Amid 2026 Tax Reform

As Nigeria prepares to roll out a new tax regime from January 2026, 149 companies currently enjoying Pioneer Status Incentives (PSI) have been assured of retaining their tax holidays for at least two more years.

Taiwo Oyedele, Chairman of the Presidential Tax Reform Committee, disclosed this during a media briefing organised by the Nigerian Investment Promotion Commission (NIPC). The move is aimed at safeguarding investor confidence and ensuring a smooth transition to the new tax framework.

“Existing firms will continue to enjoy tax exemptions for a minimum of two years. This decision is to protect investor confidence and facilitate an orderly shift to the Economic Development Incentive (EDI) under the Nigeria Tax Act 2025,” Oyedele said.

Under the PSI, eligible companies are fully exempted from paying company income tax for a set period. The new EDI scheme, which will replace the PSI, shifts focus from full tax relief to a tax credit–based framework, encouraging long-term investment, capital reinvestment, and growth in key sectors.

Uchenna Okonkwo, an official of NIPC’s Incentives Administration Department, explained that companies under the EDI will receive a 5% tax credit on qualifying capital expenditure. This credit can offset corporate income tax liabilities over an initial five-year period, with a possible five-year extension if reinvestment conditions are met.

“The EDI addresses gaps under the PSI by providing clearer sunset provisions and sector-specific investment thresholds,” Okonkwo said. “Each sector has a minimum investment threshold, and companies that meet it are entitled to a 5% tax credit on eligible expenditure. Unlike the PSI, the EDI does not offer full tax relief, but companies with high tax obligations could effectively enjoy incentive benefits for up to 15 years through unutilised tax credits.”

The retention of existing PSI beneficiaries ensures continuity for companies already benefiting from the incentive while paving the way for a more structured, credit-based tax framework under the EDI.