TAX INCENTIVES FOR RENEWABLE ENERGY INVESTMENTS UNDER THE NIGERIAN TAX ACT 2025: A DOCTRINAL AND POLICY ANALYSIS

Abstract

This article conducts a doctrinal and policy analysis of tax incentives for renewable energy investments under the Nigerian Tax Act, 20251. Against the background of Nigeria’s ongoing energy deficit and rising climate commitments, it explores how recent tax reforms reposition fiscal policy as a tool for advancing sustainable energy development. The article focuses on the Economic Development Tax Credit,2 which replaces the former Pioneer Status Incentive, and assesses its design, scope, and implications for renewable energy investors. It also examines related fiscal measures, including capital allowances, value-added tax reliefs, and customs duty exemptions applicable to renewable energy assets. Beyond statutory analysis, the article discusses the interaction between the Nigerian Tax Act 2025 and complementary legislation, notably the Electricity Act 2023, the Climate Change Act 2021, and the Nigeria Revenue Service Act 2025, highlighting areas of coherence and institutional and administrative gaps. Employing a doctrinal legal research methodology and drawing limited comparative insights from Kenya and South Africa, the article contends that while Nigeria’s incentive framework reflects international best practice in shifting towards performance-based and fiscally sustainable incentives, its effectiveness depends on administrative capacity, inter-agency coordination, and transparency in implementation. The article concluded by proposing targeted reforms to enhance the coherence, accessibility, and enforceability of Nigeria’s renewable energy tax incentive regime.