NRS: New Tax Regime Offers Incentives for Businesses, Creative Industry
The Nigeria Revenue Service (NRS) has introduced initiatives and tax incentives aimed at supporting business growth, attracting investment and expanding opportunities in Nigeria’s creative economy.
The measures include an Investment and Tax Advisory Hub and a Creative Economy Tax and Investment Initiative. Both platforms are expected to provide entrepreneurs and investors with practical guidance on tax compliance, business formalisation, investment opportunities and available incentives.
The initiatives were announced during an NRS tax policy dialogue at the Creative Africa Nexus Weekend 2026 in Lagos. The event brought together tax officials, policymakers, investors and creative industry stakeholders to discuss how Nigeria’s evolving tax framework could support businesses in the cultural and creative sectors.
Support for Creative Businesses
According to the NRS, the Investment and Tax Advisory Hub will help businesses understand their tax obligations and identify incentives for which they may qualify. The Creative Economy Tax and Investment Initiative will also strengthen engagement between the tax authority and industry operators.
The Service said it recognised the creative economy’s potential to contribute significantly to Nigeria’s gross domestic product, employment and the wider African economy. It added that policy measures and, where necessary, legislative changes would be considered to address the sector’s distinctive needs.
Tax Credits and Small Business Reliefs
Under the Nigeria Tax Act 2025 and other relevant laws, qualifying investors in designated sectors—including the creative and cultural industries—may receive a five per cent tax credit on eligible capital expenditure. This is subject to statutory conditions, including a minimum investment threshold of N250 million.
Companies with annual turnover of N100 million or less and fixed assets below N250 million may also qualify for zero company income tax and exemption from the four per cent development levy, provided they meet the applicable requirements.
Additional reliefs are available for qualifying start-ups, research and development expenditure, and eligible investments covered by the Nigeria Startup Act 2022.
Businesses operating in export processing and free trade zones may qualify for company income tax exemptions if they satisfy prescribed export conditions. These measures are intended to stimulate investment, create jobs and increase foreign exchange earnings.
Eligible taxpayers involved in cross-border activities may also receive credits for qualifying taxes paid in other countries, reducing the risk of double taxation. However, such relief depends on applicable agreements, the taxpayer’s circumstances and compliance with legal conditions.
Formalisation and Record-Keeping
NRS officials encouraged content creators and other creative entrepreneurs to formalise their businesses and maintain accurate financial records. They noted that some commercially successful creators continue to receive business income through personal accounts without adequate documentation.
Formalisation gives a business a separate corporate identity, improves credibility and strengthens its ability to attract investors, enter strategic partnerships and sign agreements with local or international organisations. It can also help creators turn personal success into sustainable enterprises that can continue beyond their individual careers.
Businesses were advised to obtain tax identification numbers and retain invoices, receipts, ledgers and other accounting documents. Proper records are necessary to demonstrate eligibility for exemptions, tax credits and other reliefs.
The NRS also clarified that only expenses incurred wholly and exclusively for business purposes may qualify as deductions. Personal costs cannot be treated as business expenses. Where an expense has both personal and commercial uses, only the portion attributable to the business may be deductible.
Clarification on VAT
The Service addressed misconceptions about value-added tax, explaining that exemption from collecting VAT on behalf of the government does not necessarily mean a small business is exempt from paying VAT on taxable goods and services it purchases.
Only goods and services specifically identified under the law are VAT-exempt. The NRS also said the VAT refund process had been streamlined, with eligible refunds expected to be processed within 30 days without a prior audit. Subsequent verification may still be conducted.
Greater Awareness Needed
The NRS stressed that tax incentives are not automatic. Businesses must meet all statutory requirements and provide evidence supporting their claims.
It also noted that earning income outside Nigeria does not automatically entitle a taxpayer to double taxation relief. Eligibility depends on factors including the taxpayer’s status and whether an applicable double taxation agreement exists.
Personal income tax obligations may fall under the jurisdiction of state tax authorities, depending on an individual’s place of residence. The NRS therefore called for continued engagement and simpler explanations to help businesses understand the roles of federal and subnational tax agencies.
The Service said sustained cooperation between the public and private sectors would be essential to improve voluntary compliance, encourage formalisation and unlock the creative economy’s contribution to Nigeria’s long-term economic ambitions.
