Designing a Tax Incentive Framework for Technology Start-Ups in Nigeria

Nigeria's technology start-up ecosystem requires targeted fiscal incentives to sustain innovation, attract investment, and create employment, and designing a professional tax incentive framework provides guidance for balanced technology sector policy. This study designed a tax incentive framework for technology start-ups in Nigeria, drawing on international practice reviews, consultations with 25 tech start-up founders, 15 FIRS officials, and 10 technology sector economists, and assessment of existing Pioneer Status Incentives and other fiscal benefits. Analysis confirmed that Nigeria's existing Pioneer Status Incentive, while applicable to technology companies, had been utilised by fewer than 5 percent of eligible tech start-ups due to complex application requirements and lengthy approval timelines. International benchmarking identified Israel's R and D incentives, India's Start-Up India tax concessions, and Kenya's tech sector preferential tax rates as effective models. The framework developed specifies a simplified Technology Start-Up Tax Incentive Programme with graduated tax holidays (three to five years), research and development investment tax credits, stock option tax deferral provisions, and a fast-track Pioneer Status application process. Expert review by 10 fiscal policy and technology sector specialists confirmed the framework's incentive design quality. Recommendations include Ministry of Finance adoption as a technology sector fiscal policy instrument and FIRS digital application portal development for start-up incentive applications.

Keywords: tax incentives, technology start-ups, Nigeria, fiscal policy, innovation economy