No More Tax Exemption Certificates, FIRS Tells Businesses

The Federal Inland Revenue Service (FIRS) has officially stopped issuing tax exemption certificates to all categories of taxpayers in Nigeria.

This new order affects companies under the Pioneer Status Incentive scheme, non-governmental organisations, and entities operating in free trade zones.

A public notice signed by FIRS Chairman, Zacch Adedeji, announced it on Monday.

“The issuance of Tax Exemption Certificates has been discontinued. Consequently, no further Tax Exemption Certificates will be issued,” the statement read.

The agency said existing certificates will remain valid only until their expiry dates. After that, no renewals will be permitted.

FIRS said any new claims for tax waivers must strictly follow current tax laws and approved procedures.

New Rules, No More Free Passes

Adedeji warned against misuse of the system.

“Any attempt to forge, alter or misrepresent exemption status will attract stiff penalties as prescribed by law,” the notice said.

The agency asked stakeholders to obey the revised rules and direct all enquiries to the Executive Chairman.

This policy change follows rising concerns about Nigeria’s growing tax expenditure and the lack of clear data on the true cost of tax incentives.

According to Adedeji, poor coordination among government agencies has made it hard to calculate how much Nigeria loses to tax waivers each year.

He recently revealed that most incentives were granted without properly weighing their actual benefit to the economy.

“There are expected benefits to be derived from the entities that enjoy these incentives,” he said.

“If adequately quantified, the financial cost to government versus benefits would be minimised, and growth would follow,” he added.

Nigeria Lost Over ₦6tn to Tax Waivers

In 2021 alone, the Nigerian government reportedly lost more than ₦6tn to tax incentives—especially under the Pioneer Status scheme.

By December 2024, 105 companies had secured tax exemptions, according to The PUNCH.

Big names on the list include Dangote Fertilisers and Mikano International Limited.

The number of firms with approved waivers rose and fell throughout 2024—starting at 104 in Q1, dropping to 83 by Q3, before jumping again to 105 by year-end.

These inconsistencies reflect ongoing confusion around the programme’s real impact.

In response, the Nigerian Investment Promotion Commission recently granted fresh tax holidays to 22 more companies, bringing further scrutiny.

Meanwhile, 25 companies were cleared for a fresh 3-year exemption, even as the government promised a full review of the system.

That review is being led by Taiwo Oyedele, Chairman of the Presidential Tax Reform Committee.

In his words, the government’s new approach is to “tie tax relief directly to verifiable investments.”

A new Economic Development Incentive scheme has already been approved in law to replace the current model. But implementation has stalled in the National Assembly.

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