Nigeria Economic Development Tax Incentive (EDTI)

Overview

The Economic Development Tax Incentive (EDTI) is Nigeria's new tax incentive scheme that became fully operational on January 1, 2026, replacing the previous Pioneer Status Incentive (PSI). The EDTI represents a significant shift from broad industry-wide tax holidays to targeted support for priority sectors with strong economic multiplier effects, beginning with manufacturing, followed by services and infrastructure.

Tax Credit Structure

The EDTI grants qualifying companies a 5 percent annual tax credit for five years, amounting to 25 percent of the total value of eligible investments. This credit is applied against the company's corporate income tax liability, providing substantial tax savings for qualified high-impact projects.

Eligibility Requirements

A key feature of EDTI is the introduction of minimum investment thresholds to ensure that only high-impact, scalable projects qualify. Companies in capital-intensive sectors such as utilities are required to invest at least ₦200 billion before accessing the tax credit. The incentive targets priority sectors including manufacturing (first priority), services, and infrastructure, with emphasis on projects demonstrating strong economic multiplier effects.

Application Process

Applications for EDTI are submitted to the Nigerian Investment Promotion Commission (NIPC). Companies must demonstrate they operate in priority sectors and meet the minimum investment thresholds for their industry. The NIPC evaluates applications based on economic impact, job creation potential, and alignment with national development priorities.

Transition from Pioneer Status

The Federal Government stopped accepting new applications for the Pioneer Status Incentive effective November 10, 2025. However, 149 companies currently enjoying pioneer status incentives will retain their tax holidays for at least two more years as Nigeria transitions to the EDTI framework. New applicants must apply under the EDTI scheme, which offers a more targeted approach to tax incentives.

Contact Information

Contact the Nigerian Investment Promotion Commission (NIPC) at www.nipc.gov.ng for EDTI application procedures and eligibility verification. The Federal Inland Revenue Service (FIRS) administers the tax credits once approval is granted.