An investigation conducted by The PUNCH has revealed that approximately 71 companies benefited from N390.26 billion in pioneer status incentives over a two-year period. This data was obtained from the Federal Inland Revenue Service annual reports, which indicated that N1.43 billion was utilized for these incentives in 2021, with a substantial increase to N388.83 billion the following year.
The Federal Government bestows tax holidays to companies holding pioneer status awards issued by the Nigerian Investment Promotion Commission. This tax incentive is in alignment with the Industrial Development Income Tax Relief Act, No. 22 of 1971, aimed at stimulating investments in various industries.
The tax holiday provides qualifying industries and products with an initial three-year exemption from corporate income tax, extendable for an additional one or two years. These incentives are meant for industries and products that are not currently present in the country.
While the Nigerian Investment Promotion Commission's second-quarter 2022 report revealed 71 beneficiaries of this tax incentive, at the close of 2021, 46 companies had already enjoyed the scheme, with 186 pending applications. This indicates that an additional 25 beneficiaries were granted the tax incentives within six months.
These beneficiary companies span various sectors, including manufacturing, solid materials, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure. Notable companies that have benefited from these incentives include Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, Stallion Motors Limited, and many others.
It's important to note that the Federal Government recently disclosed its intention to review and reduce tax waivers provided to companies operating in Nigeria. The Presidential Tax Reform Committee, led by Mr. Taiwo Oyedele, will undertake a comprehensive review of these tax waivers, aligning with the previous administration's plan. This action reflects the government's commitment to ensuring a fair and balanced tax system in the country
The Federal Government bestows tax holidays to companies holding pioneer status awards issued by the Nigerian Investment Promotion Commission. This tax incentive is in alignment with the Industrial Development Income Tax Relief Act, No. 22 of 1971, aimed at stimulating investments in various industries.
The tax holiday provides qualifying industries and products with an initial three-year exemption from corporate income tax, extendable for an additional one or two years. These incentives are meant for industries and products that are not currently present in the country.
While the Nigerian Investment Promotion Commission's second-quarter 2022 report revealed 71 beneficiaries of this tax incentive, at the close of 2021, 46 companies had already enjoyed the scheme, with 186 pending applications. This indicates that an additional 25 beneficiaries were granted the tax incentives within six months.
These beneficiary companies span various sectors, including manufacturing, solid materials, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure. Notable companies that have benefited from these incentives include Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, Stallion Motors Limited, and many others.
It's important to note that the Federal Government recently disclosed its intention to review and reduce tax waivers provided to companies operating in Nigeria. The Presidential Tax Reform Committee, led by Mr. Taiwo Oyedele, will undertake a comprehensive review of these tax waivers, aligning with the previous administration's plan. This action reflects the government's commitment to ensuring a fair and balanced tax system in the country
