Unleashing Progress: Tax Incentives for Infrastructure Projects in Nigeria – A Guide for Eligible Businesses.

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As Nigeria aspires to achieve robust economic growth and meet the demands of its burgeoning population, the development of critical infrastructure emerges as a cornerstone for progress. In line with this vision, the Nigerian government has instituted a range of tax incentives to encourage investments in infrastructure projects. These incentives not only stimulate economic activity but also pave the way for improved connectivity, enhanced services, and a higher quality of life for citizens. In this article, we will delve into the realm of tax incentives for infrastructure projects in Nigeria, shedding light on the opportunities they offer and outlining the eligibility criteria for businesses seeking to embark on transformative ventures.

The Nexus between Infrastructure Development and Tax Incentives:

Infrastructure development lays the foundation for sustainable economic growth by fostering productivity, trade, and connectivity. Recognizing its pivotal role, the Nigerian government has introduced a series of tax incentives to attract private sector participation in infrastructure projects. These incentives aim to alleviate the financial burden on investors, mitigate risks, and accelerate the pace of development.

Key Tax Incentives for Infrastructure Projects:

  1. Capital Allowances: Investors in eligible infrastructure projects can benefit from accelerated capital allowances. This allows for a faster deduction of qualifying capital expenditures, reducing taxable income and providing immediate tax relief.
  2. Tax Holidays: The government may grant tax holidays, during which businesses involved in infrastructure development are exempt from certain taxes. This respite from tax obligations enhances cash flow and enables investors to allocate resources more efficiently.
  3. Investment Tax Credit: Infrastructure projects may qualify for investment tax credits, allowing investors to offset a portion of their tax liability based on the value of their investment. This incentivizes investment in projects that align with national development priorities.
  4. Customs and Import Duty Waivers: Import duties and tariffs on equipment, materials, and machinery for approved infrastructure projects can be significantly reduced or waived. This measure reduces the cost of project implementation and promotes timely execution.
  5. Loss Carryforward: Eligible infrastructure projects that incur losses during the initial years of operation can carry forward these losses to offset taxable income in subsequent profitable years, enhancing long-term financial viability.

Eligibility Criteria for Businesses:

To harness these tax incentives, businesses must adhere to certain eligibility criteria:

  1. Project Classification: Infrastructure projects must fall within categories designated by relevant government agencies. These categories typically encompass sectors such as transportation, energy, telecommunications, water supply, and affordable housing.
  2. Minimum Investment Threshold: Some incentives may have a minimum investment requirement that businesses must meet to qualify. This threshold demonstrates the investor’s commitment to the project’s success.
  3. Project Approval: Eligible infrastructure projects require approval from relevant government bodies to ensure alignment with national development goals and adherence to regulatory standards.
  4. Local Content Participation: Some incentives may emphasize the inclusion of local content and participation, promoting job creation, skills development, and technology transfer within Nigeria.
  5. Project Viability: The project must demonstrate its economic and financial viability, as well as the potential to contribute to job creation, innovation, and overall economic growth.


Tax incentives for infrastructure projects stand as a potent catalyst for Nigeria’s progress, enabling businesses to play a pivotal role in driving development and enhancing citizens’ well-being. By capitalizing on these incentives, eligible businesses can unlock new avenues of growth, optimize financial resources, and contribute to the nation’s infrastructure landscape. As Nigeria strides towards a brighter future, the synergy between tax incentives and infrastructure projects paints a promising picture of prosperity, connectivity, and sustainable development.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.