Tax Exemption for Agricultural Businesses in Nigeria

Tax exemption for agricultural businesses in Nigeria


The agriculture sector in Nigeria enjoys Pioneer Status with attendant tax exemption to all companies operating within the sector. Simply means that companies that operate within the agricultural sector in Nigeria don’t pay taxes. 

In this article, we will examine the different reasons why these agribusinesses enjoy these tax breaks while their counterparts in other sectors are mandated to remit their taxes to the government. 

Tax Incentives for Agriculture

Government policies often encourage investment in agriculture by offering tax breaks and incentives to stimulate growth and development within the sector. These incentives are meant to attract local and foreign investors to invest into the agricultural sector which in turn leads to the production of food and raw materials in Nigeria. 

Informal Agricultural Activities

Agricultural Businesses in Nigeria are diverse, ranging from large commercial farms to small-scale subsistence farming. Many smaller agricultural enterprises operate informally, outside the formal tax net. A sizable percentage of farmers have limited access to information as well as financial constraints which makes taxing them almost impossible. 

Seasonal Income Fluctuations in Agriculture

The cyclical nature of agricultural income presents a unique challenge when it comes to tax payments. Agricultural businesses often experience Seasonal Income Fluctuations in revenue, making it challenging to maintain a consistent tax payment structure. 

Financial Inclusion for Agricultural Enterprises

Access to financial services is a critical aspect of tax compliance. Many Agricultural Businesses, especially in rural areas, face challenges in accessing formal financial services. Limited financial inclusion not only affects their ability to keep accurate financial records but also impacts their inclusion in the formal tax system.


As Nigeria strives for economic growth, finding a balance between encouraging Agricultural development and ensuring fair tax contributions is crucial. This balance not only supports the growth of the agricultural sector but also contributes to the sustainable development of the nation as a whole.

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