The relevance of the Certificate of Acceptance of Fixed Assets (CAFA) under the Nigeria Tax Act 2025

The Certificate of Acceptance of Fixed Assets (CAFA) has long been a key component of Nigeria’s tax and regulatory system. Traditionally issued under the Industrial Inspectorate Act (IIA), CAFA confirms the value of Qualifying Capital Expenditure (QCE) and has supported capital allowance claims under prior tax regimes. With the introduction of the Nigeria Tax Act (NTA) 2025, many businesses are reassessing the continued relevance of CAFA.

Legal Basis for CAFA

CAFA originates from Section 3 of the IIA, which requires companies intending to incur capital expenditure of ₦5 million and above to notify the Industrial Inspectorate Division (IID) for verification and certification. Section 5 of the IIA further mandates government bodies, including the Federal Inland Revenue Service, to rely on certified asset values in carrying out their statutory duties.

The FIRS previously enforced CAFA as part of capital allowance documentation through its administrative powers under the IIA, the FIRS Establishment Act, and the former Companies Income Tax Act.

How the NTA 2025 Reshapes CAFA Requirements

The NTA 2025 does not repeal or amend the Industrial Inspectorate Act; therefore, the legal obligation to obtain CAFA remains unchanged.

However, the Act elevates CAFA by expressly incorporating it into the capital allowance framework for priority sectors. Under Section 27(2)(a) of the NTA, companies in these sectors must obtain and submit CAFA when claiming capital allowances on qualifying capital expenditure.

The NTA also introduces a structured process requiring companies to obtain CAFA upon confirmation of their production date, with the IID mandated to issue the certificate within fourteen days after inspecting the assets, as provided in Section 172(3–6).

Priority sectors, listed in the Tenth Schedule, include industries such as crude oil and gas refining, renewable energy, mining, manufacturing of electrical equipment, and electricity and gas supply.

Conclusion

CAFA remains both relevant and essential under the NTA 2025. The IIA continues to be fully effective, and the NTA explicitly embeds CAFA into the capital allowance regime for priority sectors. As documentation requirements increase, CAFA continues to serve as a critical compliance and audit‑defence tool.

Download the full alert to explore the detailed implications for affected industries and understand the full legislative context.