FG grants three-year tax relief to 33 companies, denies 10 firms

In 2021, the Federal Government approved 33 enterprises’ applications for pioneer status under the Industrial Development Income Tax Act.

This was revealed in the Nigeria Investment Promotion Commission’s quarterly PSI reports.

The 33 corporations made N543.88 billion in investments over the year, according to the reports.

During the assessment phase, the government rejected the petitions of ten investing firms, including the popular FinTech firm Flutterwave.

The pioneer status is a federal government incentive that exempts businesses from paying income tax for a set length of time. This tax break can be complete or partial.

The incentive is widely viewed as an industrial policy aimed at boosting economic investment.

The products or companies eligible for this pioneer status are products or industries that do not already 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.

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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.

Flutterwave was one of the ten firms denied PSI in Q1 2021, according to a report.

Flutterwave said in February 2022 that its valuation has increased to $3 billion after raising $250 million in a Series D fundraising round.

According to the second quarter PSI report for the year 2021, the government awarded tax breaks to eight companies that spent a total of N12.8 billion.

In Q2, seven enterprises received preliminary permission, while no applications were refused, according to the NIPC.

The survey also revealed that 31 businesses had benefited from the tax incentive program, while 160 others had yet to apply.

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NACCIMA, NECA, and LCCI are requesting a grant from the FG for salary payment and tax reduction.

Eight companies were awarded PSI in the third quarter of last year, while two companies had their claims denied.

The companies that offered tax breaks put in a total of N328.5bn into the economy during the review period, the NIPC report said.

In Q3, according to the NIPC, the government awarded 16 corporations approval in principle, 168 applications were pending, and 35 companies benefited from the government’s tax incentive.

Meanwhile, according to the NIPC’s latest PSI report, six corporations were awarded three-year tax reliefs in the fourth quarter of last year.

Cormart Nigeria Limited, Premium Agro Chemicals Limited, West African Soy Industries Limited, Prudent Energy and Services Limited, and Checkers Africa Limited are the companies involved.

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.

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.”