Nigeria's 2026 tax landscape has undergone significant transformation with the implementation of the Nigeria Tax Act 2025. For foreign businesses and investors, understanding these changes is not just advisable—it's essential for successful market entry.
The New Tax Architecture
The reforms consolidate multiple tax laws into a unified framework, simplifying compliance while introducing new obligations. Here's what matters most for international businesses.
Corporate Income Tax Updates
The standard corporate income tax rate remains at 30% for large companies, with graduated rates for smaller enterprises. However, the introduction of a minimum effective tax rate ensures all profitable companies contribute to the tax base, regardless of incentives claimed.
Key Rate Structure
Large Companies (turnover above ₦100M): 30% CIT
Medium Companies (₦25M - ₦100M): 20% CIT
Small Companies (below ₦25M): 0% CIT for first 4 years
Economic Development Incentive (EDI)
The most significant change for investors is the replacement of the Pioneer Status Incentive with the new Economic Development Incentive (EDI). This represents a fundamental shift from time-based tax holidays to performance-based tax credits.
EDI vs Pioneer Status: What Changed
Old System (Pioneer Status): 3-5 year tax holiday (0% tax)
New System (EDI): 5% annual tax credit on qualifying capital expenditure
Duration: 5 years, extendable to 10 years with profit reinvestment
How EDI Works
Companies investing in priority sectors receive a 5% tax credit annually on their qualifying capital expenditure (QCE) for five years—totaling up to 25% credit. Unused credits can be carried forward for an additional five years.
Priority Sectors for EDI
• Agriculture and Food Processing
• Energy and Power Generation
• Transportation and Logistics
• Healthcare and Pharmaceuticals
• Manufacturing
• Technology and Innovation
EDI Application Requirements
To qualify for EDI, companies must:
1. Be incorporated in Nigeria
2. Incur qualifying capital expenditure meeting minimum thresholds
3. Apply to NIPC with investment commitment proof
4. Pay application fee (0.1% of QCE, max ₦5 million)
5. Maintain separate accounting for priority activities
Digital Tax Administration
All tax filings and payments are now processed through the TaxProMax platform, enabling remote compliance. This is particularly beneficial for foreign businesses managing Nigerian operations from abroad.
Compliance Timeline
Foreign businesses operating in Nigeria should update their tax planning before Q2 2026. Key deadlines include annual CIT returns due March 31, 2026, monthly VAT returns due by 21st of following month, and quarterly withholding tax remittance.
I-STRATA Advisory
We connect foreign businesses with qualified Nigerian tax advisors and help navigate the EDI application process. Our team ensures you benefit from all available incentives while maintaining full compliance with the new tax framework.