The Nigerian Investment Promotion Commission (NIPC) said it had granted three years of tax exemption to 34 companies in 2023.
Mrs Lovina Kayode, Head of Incentives Administration, NIPC, told newsmen in Abuja that the exemption was to promote the company’s investments drive towards developing the nation’s economy.
“This tax exemption known as Pioneer Status Incentives (PSI) is executed under the Investors Relations Department of the NIPC and allows a company three years of not paying Corporate Income Tax,” she said.
According to her, not all companies are granted incentives owing to the stringent procedures followed by the commission on waiver awards.
Earlier reports had put the average annual tax waiver figure at about N5tn. Companies including Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, and Stallion Motors Limited, among others had benefited from tax waivers from pioneer status incentives.
While acknowledging the high amount of revenue lost to waivers granted every year, Kayode said what mattered was the bigger picture, amount of forex brought into the country.
“The Federal Inland Revenue Service (FIRS) and our parent ministry, the Ministry of Industry, Trade and Investment, is also part of this process to ensure that right investors get this incentive.
“So far 34 applications have been approved, and one of the things we intend to do was to ensure that we were not just giving incentives to undeserving companies.
“Meanwhile, there is already a notion that Nigeria gives out too many waivers, incentives, and concessions.
“However, tax expenditure means what the government has lost by granting PSI, was just a small amount compared to the gains made by granting these incentives to qualified companies.”
She revealed the plans by the commission to publish impact assessment reports on the effectiveness of the pioneer status report on job creation and other economic activities to promote investments.
“On impact, that is one thing NIPC is planning on, next year, it is one of our biggest tasks to do an impact assessment.
“These incentives we gave out, how have they impacted the country in terms of job creation and what kind of import substitution has come about because we granted these incentives.
“And how much will the government gain after the three years of them (the companies defaulting paying these taxes?) ”
The Head, Policy and Advocacy of the commission, Mr. Salami Abayomi, expressed displeasure at the rate at which foreign companies/investors were leaving the country.
According to him, some challenges are responsible for this development, but the commission was working in collaboration with relevant agencies to address the issue.
He expressed optimism that by 2024, the efforts of the agencies in that regard would yield positive results.
Earlier, NIPC’s Executive Secretary, Aisha Rimi, reiterated the commission’s commitment to facilitate and assist investors to gain inroad into the country.
