About eleven indigenous companies have applied to the federal government asking for an extension in the tax holiday they have enjoyed for some years now. The argument is for the government to assist them to weather the current economic downturn in the country. Among these companies is Dangote Fertiliser Limited.
This information is contained in the recently released Quarter two of 2024 Pioneer Status Incentive Report by the Nigerian
Investment Promotion Commission (NIPC). The companies are seeking an extension of their Pioneer Status Incentive (PSI).
The applications are said to have been processed between April and June 2024 at a time the federal
government was reportedly considering a review of the tax waiver program, and according to the report, government was thinking of phasing out the PSI.
The companies seeking the extension include prominent names such as CCETC Limited;
Nest OGB Limited; Sonata Agri International Limited; West African Cubes Limited; 11 Plc,
Aarti Steel Pipe Mills Limited; Don Mac Limited; Resource Improvement and Manufacturing
Company Limited; Top Polymers Nigeria Limited, and CSS Global Integrated Farms Limited.
PSI grants companies making investments in qualifying industries and products a tax holiday
of three years from the payment of company income tax by the Industrial Development
Income Tax Relief Act, No 22 of 1971. The intention was to boost investment by the benefitting companies in the industries.
According to the NIPC report, Aurables Ventures Limited and West African Soy Limited,
have already received approval for their extension requests during this quarter.
The three-year tax holiday has the possibility of an extension for one or two additional years
to enable the industry concerned to make a reasonable level of profit within its formative
years.
The Federal Government recently inaugurated a Joint Committee of staff of the NIPC and
the Federal Inland Revenue Service (FIRS) to review the current guidelines for the
administration of the PSI, validate the cost of the incentive to Nigeria, and recommend
changes to the qualification and administration.
The mandate on the Presidential Committee on Fiscal Policy and Tax Reforms led by
Taiwo Oyedele to replace the abused pioneer status with priority sector incentives, and therefore, reward
companies based on their investments in the economy. However, existing exemptions will be honoured until they expire.
