At least 172 companies may not benefit from about N2.4tn tax waivers under the Pioneer Status Incentive and other tax exemptions as the Federal Government moves to phase out some tax waivers effective 2022, findings by The Nigeria Standard have shown.
The Federal Government is phasing out the tax exemptions for mature industries with the 2022 Finance Bill, which President, Major General Muhammadu Buhari (retd.), has sent to the National Assembly.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said the bill was designed to support the implementation of the 2023 budget as the government steps up efforts to grow tax revenue.
The latest move by the government will also affect companies operating in 71 industries or sectors that are eligible for Pioneer Status Incentive. The sectors include manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure.
According to the second quarter PSI report released by the Nigeria Investment Promotion Commission, the 172 companies are awaiting approval to become beneficiaries of the tax incentive.
Some of the countries with pending applications included Dangote Coal Mines Limited, Seven/Up Bottling Company Limited, Mikano International Limited, AA Rano Nigeria Limited, CCECC Nigeria Limited, Corinthia Villa Hotel & Suites Limited, and Red Star Oil and Gas Limited.
Others include Max Air Limited, Dukia Gold & Precious Metals Refining Company Limited, Emzor Pharmaceutical Industries Limited, Segilola Resource Operating Limited, Jabi Mall Development Company Limited (extension), Johnvents Industries Limited, Jigawa Fertilizer & Agro Allied Limited, and Flour Mills Nigeria Plc.
The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.
Offered under the Industrial Development Income Tax Act with tax reliefs for a three-year period, the incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy.
The products or companies eligible for this pioneer status are those that do not already exist in the country.
The Q2 2022 report by the NIPC further disclosed that there were about 71 beneficiaries of this tax incentive, which operate in sectors that include manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, infrastructure, among others.
