Alex Omenye
The Nigerian Investment Promotion Commission has granted tax holidays to 12 companies in the first quarter of 2024 under the Federal Government’s Pioneer Status Incentive initiative.
This information was disclosed in the NIPC’s Q1 2024 PSI report.
These new approvals bring the total number of companies benefiting from the three-year tax holiday to 104 by the end of the quarter. The 12 companies newly granted tax holidays include:
– Fouani Nigeria Limited
– Neway Power Technology Company Limited
– Starich Recycle Technologies Company Limited
– Gerawa Rice Mills Limited
– Shafa Energy Limited
– Mafa Rice Mills Limited
– A.A Rano Nigeria Limited (haulage)
– A.A Rano Nigeria Limited (Natural gas supplier)
– Basma Agric Processing Limited
– Flex Films Africa PVT Limited
– Addmie Nutrition Limited
– Dufil Prima Foods Plc
Additionally, the NIPC granted approval in principle to nine other companies, which will join the beneficiaries after fulfilling certain conditions.
The report also noted that 18 new PSI applications were received in the first quarter, while eight firms applied for an extension of their tax holidays, with only two receiving extensions.
A total of 213 fresh applications for the tax holiday were still pending as of Q1 2024.
Debates have surrounded tax incentives and the substantial revenue loss attributed to annual waivers. However, Lovina Kayode, Head of Incentives Administration at the NIPC, justified the waivers, noting that the incentives are strategically implemented to enhance foreign investments in the country.
She emphasized that not all companies are granted tax breaks, as the commission follows rigorous procedures in awarding waivers. The incentive aligns with the government’s commitment to fostering a conducive business environment and attracting investments.
“The pioneer status incentive is a stimulus that allows a company to get three years of not paying corporate income tax, just to get more investments. This process is stringent because our parent ministry and the Federal Inland Revenue Service are involved to ensure the right investors get this incentive,” Kayode explained.
The Pioneer Status Incentive grants companies making investments in qualifying industries and products a tax holiday of three years from the payment of company income tax.
The three-year tax holiday can be extended for one or two additional years to enable the industry to achieve a reasonable level of profit within its formative years.
Last year, the NIPC approved tax holidays for a total of 34 companies.
