Dangote, 106 Others Get Tax Holiday Over N2.5tn Investments
About 107 companies including Dangote and Mikano International are currently enjoying tax exemption from the Federal Government despite its insistence to discontinue the programme and drastic steps to improve its revenue base, findings by The PUNCH have shown.
It also increased the number of beneficiaries enjoying Pioneer Status under the Industrial Development Income Tax Act by 24 from 83 in the first quarter of 2023 to 107 firms by the fourth quarter of 2023.
This was disclosed in the latest Pioneer Status Incentive reports released by the Nigerian Investment Promotion Commission and obtained by our correspondent on Sunday.
An analysis of the PSI report showed that while the requests of 79 firms were newly received, 211 firms are pending; 56 companies had their applications approved in principle, while 19 firms were granted incentive extensions for another three years to 2026.
“Approvals-in-principle are subject to the payment of application fees and only take effect after the payment of such fees,” the report stated.
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.
Although the report didn’t contain the amount granted to the companies, Data from the Federal Inland Revenue Service annual reports indicated that about 71 companies enjoyed N390.26bn pioneer status incentives between 2021 and 2022.
The reports also revealed that investments made by the 107 companies during the year amounted to N2.49tn. They operate in sectors that include manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure, among others.
The companies that have benefitted include Dangote Fertilizers, Mikano International Limited, Sinotrucks West Africa Limited, West African Cubes Limited, Jigawa Rice Limited, JMG Nigeria Limited, Rain Oil Limited, Okpella Cement Plc, Greenville Liquified Natural Gas Company Limited
More included GZ Transport and Logistics Nigeria Limited, African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Company Limited.
Others included Aarti Rolling Mills Limited, Von Automobile Nigeria Limited, Ikorodu Steel Mills Limited, Confluence Metals Fabrication Company Limited, Cormart Nigeria Limited, Tiamin Rice Limited, Outsource Global Technologies Limited, Crown Flour Mills Limited, Elvis Hotels Nigeria Limited, Olam Hatcheries Limited, among others.
It also noted that the government declined the applications submitted by five investing firms including Checkers Africa Limited, Sygen Pharmaceutical Limited during the review period.
Tax incentives have been a contentious issue due to the high amount of revenue lost to waivers granted every year. The Federal Government recently disclosed plans to review and reduce tax waivers given to companies operating in Nigeria.
It said companies operating in Nigeria received tax incentives worth N6tn annually.
But officials of the commission had maintained that the incentives were meant to boost foreign investments into the country.
The Chairman of the Presidential Tax Reform Committee, Mr Taiwo Oyedele, recently said the committee would carry out a comprehensive tax waiver review in line with the plan the previous administration had set.
At a press briefing last year, the Head of Incentives Administration, Lovina Kayode, indicated that not all companies were granted tax breaks due to stringent procedures followed by the commission on waivers award.
She said, “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.
“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.
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