In Aggressive Drive For Investors, FG Considers Review Of Income Tax Incentives Scheme

The Federal Government in a bid to attract more investors into the country is considering the review of the Pioneer Status Incentive under the Industrial Development (Income Tax Relief) Act.

The Acting Executive Secretary of the Nigeria Investment Promotion Commission, Emeka Offor, stated this at a media parley on Wednesday in Abuja on the strategic plan of the NIPC.

The Pioneer Incentive Scheme is an incentive from the Federal Government which exempts companies from basically 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 fulfill expected goals; and any industry or product for which there is a favorable prospect of development.

In 2020, foreign direct investment inflow shrunk by as much as 30 per cent, with some level of recovery expected in 2021.

The prospects for significant recovery was, however, moderated by the discovery of new variants of the COVID virus and apathy against vaccination globally.

In the midst of this, the business community continues to adapt to the ‘new normal’ although there is an observable slow down on implementation of existing investment projects as well as consideration of new projects.

Offor said that in view of the fact that the quest for investments has become competitive, the NIPC would undertake a review of the qualifying list to include emerging activities that require government support while delisting activities that are matured.

He said, “We have begun the process of developing a strategic plan with a focus on the National Development Plan sectors. Critical to this strategy is the profiling of the opportunities in each State as well as sustaining the engagements with the sub-national governments.

“We would continue to build on past successes while we chart new paths for sustainable development of the capacity of staff of the State Investment Promotion Agencies while also stimulating healthy competition for investments across the regions and the States.

“We would leverage on our relationships with the Executive of the States to ensure sustained appreciation of the issues of the business environment with the understanding that the aggregation of the sub-national perception forms the national image, and also expand the coverage of Nigerian Investment Certification Programme for States.

“During the period, we would aim at completing the reform process we initiated on the process and administrative framework of the Pioneer Status Incentive under the Industrial Development (Income Tax Relief) Act.

“We would undertake the review of the qualifying list to include emerging activities that require government support while delisting activities that are matured.”

He said within the next five years, the NIPC would leverage the National Development Plan 2021 – 2022 to attract investments into the country.

The plan projected a capital requirement of N348.7trn with 86 per cent (N298.3trn) expected to be provided by the private sector.

“Mobilisation of this capital has become the focus of the Commission. It is in this respect that the Commission has begun the process of validating the records of the investment announcements.

“We expect the report from this exercise to give us a further understanding of investors’ readiness to invest in Nigeria,” he stated.

According to NIPC’s Strategic Plan from 2022 – 2026, Offor explained that validation of investment records will give the Commission direction towards a global drive on investment in Nigeria.

He added, “Further to setting an agenda for the Commission, we have begun the process of developing a strategic plan with a focus on the NDP sectors. Critical to this strategy is the profiling of the opportunities in each State as well as sustaining the engagements with the sub-national governments.

“We would continue to build on past successes while we chart new paths for sustainable development of the capacity of staff of the State Investment Promotion Agencies while also stimulating healthy competition for investments across the regions and the States.”