In creating a conducive business environment, the Lagos State government has put in place a wide range of fiscal incentives. Some of the main incentives are import concessions, tax exemption for exported products and tax reductions for qualifying companies
Lagos State has a robust tax system coupled
with favourable trade incentives
Companies Income Tax (CIT)
Education Tax (ET)
Withholding Tax (WHT)
Value Added Tax (VAT)
Capital Gains Tax (CGT)
Information Technology Tax
IT Taxes are paid by companies with turnover of above $500,000
All companies are to pay taxes to the Federal Inland Revenue Service
Companies that take advantage of the incentives
will be able to set up proper structures
Trade Incentives
Regulatory Bodies

Lagos State is willing to offer these incentives to encourage investment in the housing sector

Subsidizing statutory fees for PPP participants

Fast-tracking the issuance of land titles, to enable investors obtain funding quicker

Tax related incentives also include:

Zero tax on rental income during pioneer period

Pioneer status incentive when certain requirements are met.

Capital gains from property disposed within 3-5 years is not subject to tax

CGT-10% WHT-10% Stamp duties - 2% Property levy - Residential - 0.5% - Malls-1.25% - lndustrial-0.5%

Federal Ministry of Lands, Housing and Urban Development

Federal Housing Authority

Lagos State Real Estate Transaction Department

Real estate Developers Association of Nigeria

Nigerian Institute of Estate Surveyors and Valuers

Tax related incentives also include:

Exemption from capital gains tax on disposal of assets Zero VAT on basic food items

CIT- 30% ET-2% WHT-10%

Standard Organisation of Nigeria

National Agency for Food and Drug Administration and Control

Tax related incentives also include:

50% reduction in WHT on dividends payable to an investor in Venture project company

Capital allowance of 100% spread over 5 years

Zero capital gains tax on capital disposal within 5 years

CIT- 30% ET-2% Custom duties - 5%-75%

National Information Technology Development Agency

National Electronic Commerce Council


There is up - front funding in form of capital subsidies to cover part of the initial capital cost by the Nigeria Gap Fund for PPP

Tax incentives also include:

Zero duty on purchase of power generation equipment

20% capital allowance for 5 years

Tax holiday of 5-7 years granted to companies that manufacture transformers, meters, control panels, switch gears, cable and other electrical related equipment.

CIT - 30% ET-2% WHT-10%

Nigerian Electricity Regulatory Commission

Federal Ministry of Power

Lagos State Electricity Board


Lagos State government is willing to enter into a PPP arrangement in the operation of water transportation

Tax related incentives also includes:

Initial capital allowance of 30% on purchase of vehicles

Restriction of tax charged for shipping and airline companies to activities carried out in Nigeria

Tax holiday of 5- 7 years for ship building, maintenance of vessels, manufacturing and maintenance of aircraft

Exemption from VAT for commercial vehicles and spare parts purchased

CIT- 30% ET- 2% WHT-10%

Lagos Metropolitan Transportation Authority

National Union of Road Transport Workers


Companies involved in the formulation and manufacture of pharmaceuticals qualifies for pioneer status incentive.

Tax related incentive includes:

Tax holiday of 3-5 years

CIT- 30% ET- 2% WHT-10%

National Agency for Food and Drug Administration and Control

National Health insurance Scheme

Nigerian Medical Association

Lagos State Ministry of Health

Tax related incentive includes:

25% of income derived from tourism by hotels in convertible currencies will be exempted from tax

Tax holiday of 3 -5 years

Import duty exemption on tourism related equipment

Provision of land for tourism development at concessional rates

Availability of soft loans with long period of moratorium

CIT - 30% ET - 2% WHT - 10%

National Film& Video Censors Board

Nigerian Copyright Commission

Nigerian Broadcasting Corporation

Lagos State Ministry of Tourism and Inter- Governmental Relations

Tax related incentive includes:

Rent free land at construction stage in free zone areas

Repatriation of foreign capital investment with capital appreciation on investment

Import duty-free raw materials input

CIT- 30% ET- 2% WHT-10%

Lagos State Waste
Management Authority

Lagos State Environmental
Protection Agency

As part of the efforts to provide an enabling environment
the government has passed aggressive incentives for investors to benefit
Lekki Free Trade Zone (LFTZ)

The State Government has obtained approval frorn NEPZA for the development of the free trade zone. A minimum investment of $500,000 is required by approved enterprises to operate in the free trade zone .

The incentives for LFTZ include:

Exemption from all forms of federal. state and local government taxes. levies and rates.

Duty free import of capital equipment. machinery. raw materials components and spare parts

Freedom from legislative provisions perta ining to taxes. levies. duties and foreign exchange regulations Up to 100% foreign ownership of businesses

Repatriation of foreign capital investment at any time with capital appreciation of the investment

Unrestricted remittance of profits and dividends earned by foreign investors No import or export licences required in the zone.

Pioneer Status

Five-year tax holiday in respect of industries located in economically disadvantaged local government area of the Federation

Labour Intensive Mode of Production

Industries with high labour/capital ratio are entitled to tax concessions.

100 persons-6% tax concession

200 persons - 7 % tax

concession 1,000 persons or more - 15% tax concession

SME Incentives

SMEs have a 10% reduction in tax rate to be paid in the first 5 years of commencing business

Dividends from small manufacturing companies are exempted from tax for the first 5 years of business operations .

Research & Development Incentive

Up to 10% of profits set aside as reserve for Research and Development qualify as allowable expenses

Up to 120% of expenses on Research and Development are tax deductible provided that such research and development activities are carried out in Nigeria and are connected to the business from which income or profit is derived