Federal Government has granted tax exemption programs and bolster revenue streams, to 107 companies, including Dangote and Mikano International, the investigation conducted by The PUNCH revealed.
According to the latest reports from the Nigerian Investment Promotion Commission, obtained by The PUNCH, the number of companies enjoying Pioneer Status under the Industrial Development Income Tax Act has risen to 107 by the fourth quarter of 2023, up from 83 in the first quarter of the same year.
While 79 firms submitted new requests for the Pioneer Status, 56 companies had their applications approved in principle, with an additional 19 firms granted incentive extensions until 2026.
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The report underscores that these approvals are contingent upon the payment of application fees.l
The Pioneer Status, aimed at fostering investment in the economy, offers tax relief for a three-year period to eligible products or companies that are not already present in the country.
Although specific amounts granted to these companies were not disclosed in the report, data from the Federal Inland Revenue Service annual reports revealed that approximately 71 companies enjoyed tax incentives totaling N390.26 billion between 2021 and 2022.
The 107 beneficiary companies, operating across various sectors including manufacturing, pharmaceuticals, information and communication, and infrastructure, among others, have collectively invested N2.49 trillion during the reporting period.
Notable beneficiaries of the tax incentives include Dangote Fertilizers, Mikano International Limited, and Sinotrucks West Africa Limited, among others.
However, concerns over the high revenue loss due to tax waivers have been raised, prompting the government to announce plans to review and reduce such incentives.
The Federal Government disclosed that companies operating in Nigeria receive tax incentives worth N6 trillion annually.
Despite these concerns, officials argue that the incentives are essential for attracting foreign investments into the country.
Lovina Kayode, Head of Incentives Administration, emphasized the rigorous procedures involved in granting tax breaks, aimed at ensuring that only deserving companies benefit from the incentives.
Looking ahead, the Nigerian Investment Promotion Commission intends to publish impact reports on the effectiveness of the Pioneer Status incentive, particularly its contribution to job creation and economic growth, as part of efforts to promote responsible investment practices.
(PUNCH)