An Overview of Tax Incentives and Economic Development in Nigeria

This study examines how tax incentives function within Nigeria’s fiscal framework and evaluates their contribution to economic development, drawing lessons from the United States. It assesses the structure, purpose, and operation of Nigeria’s incentive regime and considers whether current legal and institutional arrangements can deliver development-oriented outcomes. The study addresses a gap in Nigerian tax scholarship through a doctrinal analysis of statutory provisions, regulatory practices, and administrative approaches governing incentives. Public Choice Theory and Developmental State Theory guide the inquiry by showing how institutional behaviour, governmental priorities, and administrative discretion influence fiscal measures. A doctrinal method was applied. Primary materials reviewed include tax statutes, subsidiary regulations, guidelines from tax and investment authorities, and judicial decisions defining incentives. Secondary materials, including academic literature and government reports, were examined to place Nigeria’s framework within global discussions on incentive design and development. The United States’ reliance on clear statutory thresholds, performance reviews, and structured oversight was analysed for lessons relevant to Nigeria. Content analysis was used to interpret the sources and identify strengths, inconsistencies, and reform needs. The findings show that Nigeria’s incentive provisions are weakened by fragmented laws, vague eligibility rules, and limited monitoring. In contrast, the United States illustrates how structured oversight and predictable rules strengthen effectiveness. The study concludes that Nigeria requires consolidation and clearer implementation mechanisms, recommending a unified statute, stronger supervision, and regular evaluations to support national development goals.