The Federal Government through the Nigerian Investment Promotion Commission (NIPC), has denied the application of 15 companies which sought to be granted the pioneer status under the Industrial Development Income Tax Act.
The companies are Umugini Asset Company, Aristocrats Industries Ltd, Guinness Nigeria Limited, StrongPack Limited, Grit System Ltd, Scott Industries Limited and Flexipack Ltd.
Others include Ultimus Constructions Ltd, NG Clearing Ltd, Dangote Ibese Lines 3 and 4, Dangote Cement Obajana Line 4, Promasidor Nigeria Ltd, Daraju Industries Ltd, West African Packaging Ltd and Flour Mills of Nigeria Plc.
Why the applications were denied: The NIPC in its report, disclosed that the requests from 2 out of the 15 firms were time-barred while the activities of 10 other firms were not covered under the pioneer status-incentive list.
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Explaining the situation of the 3 other companies, the commission stated that their applications were rejected because their expansion projects were not eligible under the Industrial Development Income Tax Relief Act.
According to the report of the second quarter Pioneer Status Incentive obtained from the NIPC, while 15 companies had their applications rejected, approval in principle was given to 10 firms. The report also has it that that 2 firms had their applications extended while 181 other applications were still pending.
More so, the number of firms presently benefiting from the tax incentive scheme was put at 32 while 104 companies had abandoned their applications with the NIPC.
Overview: The Pioneer Status Incentive is a tax holiday that grants qualifying companies the relief from the payment of corporate income tax for an initial period of 3 years, renewable for 1 or 2 additional years.
[READ MORE: 10 Nigerian companies pay a combined N187.9 billion taxes in first half of 2019]
While the tax exemption can be full or partial, it is pertinent to note that companies with the pioneer status do not have to pay tax for a specific period.
