About 107 companies, including Dangote and Mikano International, are currently enjoying tax exemptions from the Federal Government, despite its intention to discontinue the program and boost its revenue base, according to findings by The PUNCH.
In the latest Pioneer Status Incentive (PSI) reports released by the Nigerian Investment Promotion Commission, it was revealed that the number of beneficiaries enjoying Pioneer Status under the Industrial Development Income Tax Act has increased from 83 in the first quarter of 2023 to 107 firms by the fourth quarter of 2023.
“The approvals-in-principle are subject to the payment of application fees and only take effect after the payment of such fees,” stated the report.
“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,” explained Lovina Kayode, the Head of Incentives Administration. “This process is stringent because our parent ministry and the federal inland revenue service are involved to make sure the right investors get this incentive.”
The investments made by the 107 companies during the year amounted to N2.49tn across various sectors, including manufacturing, solid materials, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure, among others.
“The whole idea of incentives is to grow the economy,” stated Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise. “When you are growing the economy, you are not only looking at revenue, you are looking at employment and multiplier effects.”
“The process should be transparent and seen as an effort by the government to grow the economy,” Yusuf emphasized.
