NIPC ends PSI applications ahead of full rollout of the Economic Development Tax Incentive (EDTI) on January 1
The Federal Government has officially stopped accepting new applications for the Pioneer Status Incentive (PSI) effective November 10, 2025, a move that brings an end to the three-year tax holiday previously available to qualifying companies starting new operations in Nigeria.
The Nigerian Investment Promotion Commission (NIPC) said the suspension marks the beginning of Nigeria’s transition to the new Economic Development Tax Incentive (EDTI) scheme, which becomes fully operational on January 1, 2026.
According to the Commission, corporate organisations and investors are advised to engage promptly with the NIPC to understand the requirements of the new framework and ensure a smooth transition. The Commission also urged both current PSI beneficiaries and companies intending to apply to consult its offices for guidance on compliance under the EDTI regime.
The Pioneer Status Incentive was created under the Industrial Development (Income Tax Relief) Act, Cap I7, Laws of the Federation of Nigeria 2004, targeting sectors critical to national development including manufacturing, agriculture, technology, and infrastructure. Under the scheme, eligible companies enjoyed a 100 per cent exemption from Company Income Tax for three years, with the option of a two-year extension.
The incentive supported businesses producing goods and services deemed vital to Nigeria’s industrialisation and economic diversification agenda.
Shift to the EDTI Scheme
The new Economic Development Tax Incentive represents a significant shift from the pioneer status model. Unlike the PSI, which offered broad industry-wide tax holidays, EDTI is designed to specifically support priority sectors with strong economic multiplier effects—beginning with manufacturing, followed by services and infrastructure.
A key feature of EDTI is the introduction of minimum investment thresholds to ensure that only high-impact, scalable projects qualify. For example, companies in capital-intensive sectors such as utilities will be required to invest at least ₦200 billion before they can access the tax credit.
The EDTI grants qualifying companies a 5 per cent annual tax credit for five years, amounting to 25 per cent of the total value of eligible investments. This benefit is in addition to existing capital allowances, making the scheme particularly attractive to long-term, growth-focused investors.
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