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Incentives

One of the basic government concerns for the present administration led by Okezie Victor Ikpeazu (PHD) is to regulate and provide a conducive investment environment within which the private sector and indeed any investor could freely operate. Abia state is one of the states known to have the highest concentration of SME’s in Nigeria. Consequently, the state government has put in place some incentives to enhance investment and attract potential investors to the state. These incentives are below;

  • Establishment of the one-stop shop (Abia Investment House). 

The  one stop shop will ease the process of establishment of any business concern in the state. The shop would also serve as an avenue for entrepreneurs and MSME-supporting Ministries, Departments and Agencies (MDAs) to interface.

  • Development of clusters for SME’s

Some of the fully functional leather and allied – men and women foot wear clusters have been created within the popular Ariaria International Market and Umuehilegbu Industrial Market Aba

  • Development of Industrial estates/layouts

The state government is providing Industrial estates/layouts with a framework that will offer common facility centres. Some of the industrial estates/layouts ongoing are;

Ovom industrial Workshop estate, Aba

Ohiya workshops Estate, Umuahia

Tarpaulin metal fabricators, Osisioma

Ubakala Industrial Estate, Umuahia South

  • Development of government websites to ease communication

This will ultimately facilitate the ease of accessing all fees related to your industry and providing a platform to pay for these fees. Through this medium we will drastically reduce multiple taxation and exploitation of investors by unscrupulous private collectors.

Investment incentives for Industrial Parks and Special Economic Zones

 

Incentive

Description

1

Pioneer Status

Tax holiday granted to qualified or eligible industries anywhere in the country and

a three to five-year tax holiday in respect of industries located in economically  disadvantaged local government areas of the federation. At the moment, there are  71 approved industries declared pioneer industries, which can benefit from tax  holiday.

These include: processing and preservation of food crops and fruits, manufacture of  iron and steel from iron ore, manufacture of cement, manufacture of glass and  glassware, manufacture of ceramic products, formulation and manufacture of  pharmaceuticals, etc.

2

Tax Relief for

Research and  Development (R&D)

Up to 120% of expenses on R&D are tax deductible provided that such R&D

activities are carried out in Nigeria and are connected with businesses to which  allowances are granted.

3

Local Raw Materials

Utilization

20% tax concession for five years to industries that attain minimum local raw

materials sourcing and utilization.

4

Labor Intensive Mode

of Production

Industry employing 1000 persons or more will enjoy 15% tax concession.

5

Local Value Added2

10% tax concession for five years. This applies to engineering industries, where

some finished imported products serve as inputs. The concession is aimed at  encouraging local fabrication rather than the mere assembly of completely knocked  down parts.3

6

In-Plant Training

Applicable to industrial establishments that have set up in-plant training facilities.

2% tax concession for five years of the cost of the facilities for training.

7

Export Oriented

Industries

10% tax concession for five years. Applies to industries that export not less than 6%

of their products.

8

Investment in

Infrastructure

Incentive granted to industries that provide facilities that ordinarily should have

been provided by the Government. 20% of the cost of providing basic  infrastructures such as roads, water, electricity, where they do not exist, is tax  deductible.

9

Investment in

Economically  Disadvantaged  Areas

A pioneer industry sited in economically disadvantaged local government area is

entitled to 100% tax holiday for seven years and additional 5% depreciation  allowance over and above the initial capital depreciation.

 

Incentive

Description

1

Free Zone Status

Where an industrial park is declared a Free Zone pursuant to the NEPZA Act, the

following incentives will apply to the enterprises located within the free zone:

  • Complete tax holiday for all federal, state and local government taxes, rates,  custom duties and levies;
  • Duty-free, tax free import of raw materials for goods destined for re-export;
  • Duty free introduction of capital goods, consumer goods, components,  machinery, equipment and furniture

SN

Non-Incentive

Description

1

Free Zone Status

Where an industrial park is declared a Free Zone pursuant to the NEPZA Act, the

following non-fiscal incentives will apply to the enterprises located within the free  zone:

  • One-stop approval for all permits, operating licenses and incorporation papers;
  • 100% foreign ownership of investments;
  • Waiver of all import and export licenses;
  • Waiver on all expatriate quotas for enterprises operating in the zones;
  • Prohibition of strikes and lockouts;
  • Rent-free land during the first 6 months of construction