Stakeholders in Nigeria's technology and innovation ecosystem have called for stronger implementation of tax incentives under the Nigeria Startup Act, emphasizing that these measures are crucial for attracting investment, supporting innovation, and driving economic growth.
The call was made during the startup technical training series five organized by the Franco-Nigeria Chamber of Commerce and Industry (FNCCI) in partnership with French Tech and Duplo in Lagos.
Fiscal Policies for Emerging Businesses
Speaking on startup tax incentives, Senior Associate at ALEX, Jibrin Dasun, highlighted the importance of fiscal policies designed to reduce the burden on emerging businesses and encourage long-term investment in the digital economy. According to him, the Nigeria Startup Act 2025 provides a range of incentives for labeled startups, including tax holidays, investment tax credits, capital gains tax exemptions, and research and development deductions aimed at strengthening the country's innovation ecosystem.
The Act allows qualified startups operating in pioneer sectors to enjoy tax reliefs for an initial three-year period, renewable for an additional two years, subject to approval by the Nigerian Investment Promotion Commission (NIPC).
Positioning Nigeria as a Digital Hub
Dasun noted that the incentives were introduced to position Nigeria as a leading hub for digital entrepreneurship in Africa by lowering operational costs for startups and making the sector more attractive to local and foreign investors. He explained that investors in labeled startups may also benefit from tax credits of up to 30 percent on qualifying investments, while capital gains from startup investments held for at least two years could be exempted from taxation.
Also speaking, Manager, Finance and Tax Consultant at KPMG Africa, Nicholas Etsu, said under the framework of the Startup Act, startups operating in sectors covered by the Pioneer Status Incentive Scheme may qualify for income tax relief for an initial three-year period, with the possibility of an additional two-year extension. He added that the incentives also extend to investors, including angel investors, venture capital firms, accelerators, and incubators. The policy allows qualifying investors to access tax credits and exemptions on gains derived from investments in labeled startups.
