The Federal Government has officially stopped receiving applications for the Pioneer Status Incentive, effective November 10, 2025.

This cessation means that corporate organizations will no longer be able to enjoy the initial three-year tax-free incentives for new businesses under the existing scheme.

The Nigerian Investment Promotion Commission stated that this step is part of the preparations for the full transition to the new Economic Development Tax Incentive scheme, which is officially scheduled to take effect on January 1, 2026.

The NIPC further encouraged corporate organizations and investors to act promptly in accordance with the new tax incentive framework. It also recommended that both existing PSI beneficiaries and new applicants should consult with the Commission to ensure a seamless transition and full compliance with the requirements of the upcoming EDTI scheme.

The PSI, which is administered by the NIPC, was established under the Industrial Development (Income Tax Relief) Act, Cap I7, Laws of the Federation of Nigeria 2004. It was specifically targeted at industries identified as essential to national development, such as manufacturing, agriculture, infrastructure, and technology, providing a significant boost to businesses contributing meaningfully to Nigeria’s economic diversification and industrialization goals.

Pioneer status is defined as a tax incentive granted by the Nigerian government to eligible companies under the Industrial Development (Income Tax Relief) Act. It provides an exemption from Company Income Tax for an initial period of three years, which may be extended for up to two additional years, subject to necessary regulatory approval.

The tax relief applies to businesses operating in sectors or engaged in the production of goods and services deemed essential to Nigeria’s economic transformation, with the broader goal of promoting investment, industrial growth, and sectoral diversification. Under the PSI, investors enjoyed a 100% tax exemption for an initial three years, renewable for two years, totaling up to five years.

The EDTI is noted as a departure from the PSI scheme, being structured primarily around priority sectors. These include manufacturing, followed by services and infrastructure that are expected to have strong multiplier effects on the wider economy.

Another key design feature of the EDTI is the introduction of minimum investment thresholds to ensure that only scalable and impactful projects qualify. For example, companies operating in capital-intensive sectors like utilities would need to invest at least N200 billion to be eligible for the tax credit.

The EDTI, which is time-bound, sector-targeted, and tied to the demonstration of actual capital deployment, grants qualifying companies a 5% annual tax credit over five years, totalling 25% of the value of their qualifying investment. Importantly, this tax credit is offered in addition to existing capital allowances, which makes the new scheme particularly attractive to long-term investors.