Nigeria’s new tax laws come with a game-changing opportunity that many business owners don’t know about: you can actually reduce your taxes by investing in what the new laws identify as ‘priority sectors.’ Under the new Nigeria Tax Act 2025, businesses and individuals who invest in priority sectors can qualify for tax credits. This means real money off your tax bill while helping Nigeria’s economy grow.
Whether you’re thinking of expanding your business, launching a new venture, or redirecting your investments, this could save you millions while positioning your business for long-term success.
What Are Priority Sectors?
The Federal Inland Revenue Service (FIRS), working with the Ministry of Finance, now designates specific sectors as vital to Nigeria’s long-term development. These are industries with the highest potential to create jobs, stimulate exports, and strengthen national self-sufficiency.
The priority sectors currently recognized under the Act include Agriculture and Agribusiness, Renewable Energy and Power, Healthcare and Pharmaceuticals, Education and Skills Development, Technology and Innovation and Export-Oriented Manufacturing.
Each of these areas represents a cornerstone of Nigeria’s economic agenda: food security, clean energy, industrial diversification, digital competitiveness, and human capital development.
How Tax Credits Work
To understand the opportunity, it’s important to distinguish between a tax deduction and a tax credit. A deduction merely lowers your taxable income, it reduces the base on which your tax is calculated. A tax credit, by contrast, is far more powerful: it reduces your actual tax bill directly.
Under the new tax rules, approved investors in priority sectors, that is, those who receive the EDIC certificate, can claim tax credits worth between 10% and 30% of their qualifying capital investment, depending on the project type and sectoral impact. Projects that create substantial employment or yield export earnings qualify for higher rates within that range.
For example, a renewable energy firm investing ₦100 million in a rural mini-grid project that powers multiple communities could receive a ₦25 million tax credit, effectively cutting a ₦30 million corporate tax bill down to ₦5 million. The credit applies against Companies Income Tax (CIT) but can also offset Tertiary Education Tax (TET) in some cases. Even more advantageously, if you cannot use your entire credit in one year, that is, if your tax bill is smaller than your credit, you may carry the balance forward for up to five years.
How to Get Your Economic Development Incentive Certificate (EDIC)
To access these credits, businesses must obtain an Economic Development Incentive Certificate (EDIC), the official document that validates your eligibility. The process is rigorous but navigable.
First, you identify a qualifying project within a priority sector. It could be a new agro-processing facility, a solar microgrid in Ogun, or a vocational tech hub. You then prepare a business plan showing how your project contributes to Nigeria’s economic priorities, including job creation, export capacity and local value addition.
The application, submitted to the Incentives Coordination Unit under the Federal Ministry of Finance in partnership with the National Revenue Service (which replaces the FIRS under the new Act), must include proof of business registration, financial capacity, and compliance with existing tax obligations. Once approved, you receive an EDIC valid typically for three years, renewable upon performance review.
A critical rule applies here and that is, you must apply before commencing the investment. The incentive is designed to shape future behaviour, not reward past actions.
Real-Life Examples
Consider Adaora, who runs a solar installation firm in Lagos. In 2026, she invests ₦20 million in equipment and training, creating 50 new jobs. Her project qualifies as renewable energy infrastructure under the priority sector list. After review, she receives a ₦6 million tax credit, thus reducing her corporate tax liability from ₦8 million to ₦2 million.
Or take Emeka, a young agribusiness entrepreneur who builds a rice processing facility in Kebbi State. His ₦100 million capital investment earns him a ₦25 million tax credit spread over three years. That means instead of paying ₦30 million in corporate taxes, he pays ₦5 million and frees up capital to expand operations.
Similarly, Kemi, who invests ₦15 million in diagnostic equipment for a medical center in Kano, qualifies for a ₦4 million credit. She reinvests those savings to open a second branch. In every case, the incentive rewards profitability while accelerates productive reinvestment.
Staying Eligible
The EDIC isn’t a one-time pass. Maintaining your eligibility requires that you stay compliant and be transparent in your reporting. Beneficiaries must file annual performance reports that show their economic and social impact, including job numbers, community benefits and environmental standards.
If a company fails to uphold these conditions, for instance, by abandoning its project, falsifying claims, or breaching labour laws, the certificate can be revoked and previously claimed credits recovered with interest and penalties. This accountability mechanism ensures the incentive isn’t abused and that the public actually benefits from the fiscal sacrifice the government makes.
In a striking move toward transparency, the government will now publish annual lists of EDIC recipients that will show the companies, project types, locations and measurable outcomes. The goal is to build public trust and reward legitimate impact. For companies, this disclosure doubles as a credibility badge. Investors, partners and lenders increasingly look favorably on firms with verified economic impact credentials.
The government’s logic is straightforward: tax incentives must generate more value than they forgo. By concentrating relief on sectors that multiply employment, productivity, and foreign exchange, the state expects to reclaim the forgone tax revenue through economic expansion. This model follows international best practices that are similar to Kenya’s Special Economic Zone credits and Ghana’s Investment Promotion Centre incentives, but tailored for Nigeria’s fiscal environment.
Common Questions and Answers
Q: Can small businesses apply for these incentives?
A: Yes, there’s no minimum investment size specified. Even small investments in priority sectors can qualify.
Q: What if my business operates in multiple sectors?
A: You can get credit for the portion of your investment that goes into priority sectors, as long as it’s clearly defined and measurable.
Q: How long does the application process take?
A: Processing times vary, but typically range from 3-6 months depending on the complexity of your project and sector.
Q: Can I apply for multiple EDICs for different projects?
A: Yes, each qualifying project can have its own EDIC, as long as they meet the requirements.
Q: What happens if I sell my business?
A: EDICs are typically transferable to new owners who commit to maintaining the same priority sector focus and obligations.
How Taxpal Can Help You Navigate Priority Sector Incentives
Securing and maintaining priority sector tax credits requires careful planning and ongoing compliance. Taxpal provides specialized support for businesses seeking these incentives, including:
- EDIC application assistance to maximize your chances of approval
- Priority sector analysis to identify the best opportunities for your business
- Compliance monitoring to ensure you maintain your certificate
- Impact measurement to demonstrate ongoing economic benefits
- Documentation support for all reporting requirements
Visit their website to choose between in-person consultations or portal access, and let them help you turn tax savings into business growth. Whether you’re just exploring options or ready to apply, they’ll guide you through every step of the process.
