Nigerian manufacturers are poised for a major boost in 2026 thanks to the implementation of the Nigeria Tax Act (NTA) 2025, which came into effect on January 1. The legislation introduces performance-based incentives designed to reward investment and growth, marking a shift from traditional revenue-focused taxation to a system that actively supports industrial development.
Kehinde Folorunsho, Partner at Kreston Pedabo Professional Services, describes the NTA as one of the most comprehensive overhauls of Nigeria’s tax framework in decades. According to him, it consolidates multiple tax laws into a single, cohesive system that encourages manufacturers to align operations with growth-focused fiscal policies. “For manufacturers, the conversation is no longer just about compliance; it’s about leveraging incentives to expand and invest,” Folorunsho explained.
A key feature of the new law is the Economic Development Tax Incentives (EDTI), targeting sectors such as manufacturing, agro-processing, mining, and renewable energy. Eligible manufacturers can claim a 5% annual tax credit on capital expenditure for up to five years. Those producing “priority products” can also earn an Economic Development Incentive Certificate, opening doors to longer-term tax benefits if profits are reinvested into expanding priority industries.
The law also simplifies deductions and cost recovery for manufacturers. It introduces a 5% turnover deduction for research and development, revises capital allowance rules with uniform annual rates, and consolidates levies into a single 4% Development Levy. In addition, VAT rules now support locally produced essentials with zero-rating, while smaller manufacturers with N50 million turnover or less enjoy a 0% corporate tax rate, further reducing costs and easing compliance burdens.
Finance Minister Wale Edun emphasized that the legislation aims to make local manufacturing more competitive. By offering tax rebates, lower corporate rates, and exemptions on duties for industrial imports, the Act encourages both new and existing firms to grow operations in Nigeria. “Local manufacturing drives economic growth, job creation, and long-term sustainability,” Edun stated, highlighting that these incentives are designed to strengthen Nigerian industries regionally and globally.
source: vanguard