The Nigerian Investment Promotion Commission (NIPC) has said that the number of companies benefiting from tax holiday under the Federal Government’s Pioneer Status Incentive (PSI) increased to 71 in Q2 2022. The body disclosed this in its Q2 PSI report, adding that 26 firms were granted full approval to be part of the beneficiaries in the quarter.
NIPC said it also granted approval in principle to 16 more companies in the second quarter to join the growing list of beneficiaries. According to the Commission, a total of 172 applications for the PSI status were still pending at the end of Q2.
The 16 companies that will be joining the list of tax holiday beneficiaries include Metal Manufacturing Nigeria Limited, Italy Ceramics Company Limited, Equipment & Protective Applications International Limited, Sifax Shipping ICT Limited, Afam Power Plc, CCETC SUK Power Company Limited, and Greenville Liquefied Natural Gas Limited.
Others are Lucky Fibres Limited, Evercare Hospital Lekki Limited, Kings Flour Mills Limited, Karma Agric Feed & Foods Limited, Integrated Automobile Services Limited, Metal berg Manufacturing Limited, Whitefield AgroProcessing Limited, Prudent Effson Commodities Limited, and Caverton Helicopters Limited.
What you should know
- A pioneer status incentive grants companies making investments in qualifying industries and products a tax holiday of three years from the payment of company income tax.
- The three-year tax holiday has the possibility of an extension for one or two additional years to enable the industry concerned to make a reasonable level of profit within its formative years.
- The Federal Government recently inaugurated a Joint Committee of staff of the NIPC and the Federal Inland Revenue Service (FIRS) to review the current guidelines for administration of the PSI, validate the cost of the incentive to Nigeria, and recommend changes to the qualification and administration.
Meanwhile, the President of the Institute of Software Practitioners of Nigeria (ISPON), Mr. Chinenye Mba-Uzoukwu, has called for the exemption of all tech startups in the country from payment of tax by incorporating them into the PSI policy. According to him, all the startups in Nigeria are operating in new terrain, which automatically should earn them the pioneer status.
He added that the best way to drive startup growth in Nigeria is to allow them to operate freely for some years without placing any tax burden on them.
