All businesses in agro-allied, manufacturing and mining sectors enjoy Pioneer Status in Nigeria. Pioneer status is a tax holiday granted to industries anywhere in the Federation and five to seven (5-7) year tax holiday in respect of industries located in economically disadvantaged local government area of the Federation.
The grant of Pioneer Status to an industry is aimed at enabling the industry concerned to make a reasonable level of profit within its formative years.
The amount of capital allowance to be enjoyed in any year of assessment is restricted in Nigeria to 75% of assessable profit in case of manufacturing companies and 66% in case of others, except such companies in agro-allied industries that are not affected by this restriction. If leased assets are used in agro-allied ventures, the full (100%) capital allowance claimed will be granted. Moreover, where the leased assets are agricultural plants and equipment, there will be an additional investment allowance of 10% on such expenditure.