The Federal Government in a bid to stimulate investments in various sectors of the economy has granted a three year tax incentive to 33 companies under the Industrial Development Income Tax Act.
The Pioneer status is an incentive from the Federal Government which exempts companies from paying income tax.
The incentive is also known as tax holiday and it is generally regarded as an industrial measure aimed at stimulating investments into the economy.
This means the companies with pioneer status do not have to pay tax for a certain period of time allowing the company to get established. This tax exemption can be full or partial.
The products or companies suitable for this pioneer status are industries or products that do not already exist in the country; the existing industry do not meet the required needs or fulfil expected goals; and any industry or product for which there is a favourable prospect of development.
An analysis of the first quarter Pioneer Status Incentive report released by the Nigeria Investment Promotion Commission showed that 33 companies were given three years tax holidays.
The companies that got the waivers are Confluence Metal Fabricating Company, Unicane Industries Ltd, Grand Pela Hotel, Globus Resources, Karshi Agro Farms, Obu Cement, Crown Flour Mills, and Pan African Towers.
There is also Hijira Fertiliser Company, Olam Hacteries Ltd, Polar Petrochemicals, Dangote Sinotrucks, Royal Pacific Group, Kunoch Hotels, Medlog Logistics, Tiamin Rice Ltd, Honeywell Four Mills and Masters Liquefied Gas
THE WHISTLER had exclusively reported on Monday how the Federal Government rejected the application of ten companies to enjoy tax incentives under the Industrial Development Income Tax Act.
The requests of the firms according to the NIPC Report showed that some of the businesses activities to which incentives were being sought for were either not eligible under the PSI, or the application was time barred.
The businesses that the ten companies are engaged in are soap manufacturing, real estate development, rice milling, manufacturing of woven sacks, production of mattresses, solar power generation, manufacturing of grain products, hotel and online payment services.
One of Companies that had its applications declined is Fountain Manufacturing Company Ltd whose management sent in their application on January 24, 2019.
The company which is in the business of manufacturing soap had its application declined by the Federal Government on March 29 this year as the activity for which incentive was being sought for is not covered in the scheme.
Also, the application of Echostone Development Nigeria Ltd which was received on May 17 2019 was rejected on March 31 because the contract project is not allowed under Industrial Development Income Tax Act.
Other companies that have their application rejected are Al-Hamsad Rice Mill Ltd, Benchmark Constructions Ltd, Super Packaging Ltd, and Royal Form Products Nigeria Ltd.
The rest are Engie Fenix Nigeria Ltd, Flour Mills of Nigeria Ltd, Envoy Hotel Ltd, Flutterwave Technology Solutions Ltd.