Industrial establishments are expected to engage in research and development (R&D) activities for the improvement of their processes and products. Tax relief is given for such projects.
Up to 120% of expenses for R&D projects are tax deductible. Regarding expenses for R&D on local raw materials, up to 140% are tax deductible. Where the research is long-term, it will be regarded as a capital expenditure and will be written off against profit.
Tax relief for R&D are given provided that such activities are carried out in Nigeria and are connected with the business from which income or profits is derived.