The Federal Government approved 33 companies ‘ application for pioneer status under the Industrial Development Income Tax Act in 2021.
The Nigeria Investment Promotion Commission‘s quarterly PSI reports revealed this.
The findings also revealed that the 33 companies invested a total of N543.88 billion over the year.
During the evaluation phase, the government rejected the applications of ten investing firms, including the prominent FinTech Flutterwave.
The pioneer status is a federal government incentive that exempts businesses from paying income taxes for a set period of time. This tax break can be total or partial.
The incentive is often viewed as an industrial strategy aimed at boosting economic investment.
Products or businesses that are eligible for pioneer designation are those that do not currently exist in the country.
According to the first quarter PSI report, ten companies had their requests denied, three companies had their applications approved in principle, and six companies were given PSI for a three-year period.
In Q1, 33 firms benefited from the tax incentive plan, while 132 companies’ claims were still pending, according to the report.
The enterprises that received tax breaks had invested a total of N45.5 billion in the Nigerian economy as of March 31, 2021.
According to journalists, Flutterwave was one of the ten businesses rejected PSI in Q1 2021.
Seven firms got approval in principle while no application was denied in Q2, the NIPC said.
The report also revealed that 31 firms were benefitting from the tax incentive scheme, while the requests of 160 companies were still pending.
In the third quarter of last year, eight firms were granted PSI while the requests of two companies were rejected.
The firms offered tax holidays invested a whopping N328.5bn into the economy during the review period, the NIPC report said.
The NIPC also revealed that the government granted approval in principle to 16 firms, 168 applications were pending and 35 companies were benefitting from the government’s tax incentive in Q3.
Meanwhile, the latest PSI report from the NIPC revealed that in the last quarter of the year, six companies were granted tax reliefs for a three-year period.
The companies are First Independent Power Company, Cormart Nigeria Limited, Premium Agro Chemicals Limited, West African Soy Industries Limited, Prudent Energy and Services Limited, and Checkers Africa Limited.
In Q4 2021, these companies contributed N157.08 billion to total investments.
Further examination of the Q4 report found that 13 companies had their applications granted in principle during the period, while one company’s application was declined.
As of the end of 2021, 46 companies have benefited from the tax incentive program, while 186 companies’ requests were still waiting.
In an interview with journalists, NIPC Acting Executive Secretary Emeka Offor told stakeholders that the commission will engage with local and international stakeholders this year to increase FDI into the country.
Emeka had said, “I can assure you that already, we have been getting greater response and inquiries from potential investors, within the country and across the globe.
“We plan to hold more stakeholder engagements in 2022.”