Business | January 16, 2026 | By Kwame Adeyemi
The Federal Government has reassured operators in the manufacturing sector that the newly implemented tax laws will usher in a more competitive and growth-driven environment. Officials say the reforms are designed to stimulate inclusive growth, reduce compliance burdens, and enhance Nigeria’s global competitiveness.
At a hybrid stakeholders’ engagement held at MAN House, Ikeja, Lagos, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, highlighted the strategic benefits embedded in the new tax regime.
Key Features of the New Tax Laws
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Tax Exemptions for SMEs: Small and medium-scale manufacturers with an annual turnover of ₦100 million or less are now fully exempt from Companies Income Tax (CIT).
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Reduced CIT for Larger Firms: The CIT rate for bigger companies will be cut from 30% to 20%, aligning Nigeria’s tax rates with global standards.
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Economic Development Incentive (EDI): A new scheme replacing the “pioneer status” holidays, offering a 5% annual tax credit for five years on qualifying capital expenditures.
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VAT Recovery: Manufacturers can now recover input VAT on all purchases, including services and fixed assets, eliminating hidden costs and improving cash flow.
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Zero-Rated Essential Goods: Basic food items, medical supplies, and educational materials are zero-rated, allowing manufacturers to claim full VAT refunds while charging zero percent to consumers.
Oyedele emphasized that these reforms are not only about easing the tax burden but also about incentivizing investment in modern machinery, advanced technology, and sustainable production practices.
He noted that the simplified tax landscape will encourage innovation, reduce production costs, and make locally produced goods more affordable, ultimately strengthening Nigeria’s manufacturing base.
