Effect of Tax Holidays on Investment Decisions of Nigerian Entrepreneurs

This study investigates how tax holiday provisions influence investment decision-making among Nigerian entrepreneurs. Tax holidays, which temporarily exempt qualifying companies from corporate income tax, are granted primarily through the pioneer status mechanism administered by the Nigerian Investment Promotion Commission. Despite being one of Nigeria's most prominent investment incentive tools, empirical evidence on whether they substantively alter entrepreneur investment behaviour at the grassroots level remains limited. A descriptive survey design is adopted, with data collected from 200 entrepreneurs operating in the manufacturing, agro-processing, and technology sectors across Lagos, Enugu, and Kano. The questionnaire assesses awareness of pioneer status provisions, application experiences, and the extent to which tax holiday eligibility influenced business establishment, scale, or sectoral choice. Descriptive statistics and chi-square tests are applied. The study anticipates finding that while awareness of tax holidays is relatively high among entrepreneurs in Lagos, it declines significantly in other regions. The application process is widely perceived as burdensome and non-transparent, limiting actual uptake. Recommendations include simplifying the pioneer status application process, publishing a clear and current eligibility list, introducing automatic eligibility for qualifying small businesses below a defined revenue threshold, and creating an entrepreneur advisory portal to guide applicants through the incentive landscape. Keywords: tax holiday, pioneer status, investment decisions, entrepreneurs, NIPC.