The federal government has rejected the application of 10 companies seeking pioneer status under the Industrial Development Income Tax Act in Q1 2021.
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.
The incentive is generally regarded as an industrial measure aimed at stimulating investments into the economy.
The products or companies eligible for this pioneer status are products or industries that do not already exist in the country.
An analysis of the first quarter Pioneer Status Incentive report obtained from the Nigeria Investment Promotion Commission showed that while the requests of 10 firms were denied, three companies had their applications approved-in-principle, while six firms were granted PSI for a three-year period.
The report also revealed that 33 firms are currently benefitting from the tax incentive scheme, while the requests of 132 companies were still pending.
The six companies that were granted a tax holiday between January and March are Pan African Towers Ltd, African Foundries Ltd, Aarti Rolling Mills Limited, Princess Medi-Clinics Nigeria Ltd, Medlog Logistics Ltd and Tiamin Rice Ltd. (Punch)