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www.spnglegal.com_____________________________________________________________________________________ Registration at the State Tax OfficeAll employers shall register with the relevant state tax authority for income tax. Once the application isfiled with a copy of the certificate of incorporation attached, a reference file is opened for the company.TAX INCENTIVESThe following are some of the tax incentives available to investors in Nigeria:Pioneer StatusThis incentive is issued by the Nigerian Investment Promotion Commission (NIPC). The benefit of apioneer status certificate is that the company is exempted from paying tax for a specified number of years.The exemption is for 5 years if the company is in an urban area while it is 7 years for companies in ruralareas.Agricultural Sector• Companies engaged in agricultural trade or businesses are not liable for minimum tax.• Non – restriction of the capital allowance claimable by the companies to 66% of assessable profit.• Tax exemption of the interest earned from agricultural loans, provided the moratorium is not lessthan 18 months and the rate of interest is not more than the base lending rate at the time of theloan.Oil & Gas SectorThe following fiscal incentives have been approved by the government in the gas production phase:• Tax rate under Petroleum Profit Tax (PPT) Act to be at the same rate as company tax which iscurrently at 30%;• Capital allowance at the rate of 20% per annum in the first 4 years, 19% in the 5th year and theremaining 1% in the books;• Investment tax credit at the current rate of 5%;• Royalty at the rate of 7% on shore and 5% offshore.Solid MineralsCompanies engaged in the mining of solid minerals are entitled to enjoy tax – free holiday for the first 3to 5 years of operation. They are also entitled to claim initial and annual allowance as follows:• Initial allowance 30%_____________________________________________________________________________________Doing Business in NigeriaAn Investor’s Guide- 2013Page 14 of 36