The Federal Government has rejected the application of 10 companies seeking pioneer status under the Industrial Development Income Tax Act in Q1 2021.
The pioneer status is an incentive offered by the Federal Government, which exempts companies from remitting full/partial income tax for a certain period.
The incentive is generally regarded as an industrial measure aimed at stimulating investments into the economy.
The products or companies eligible for this pioneer status are products or industries that do not already exist in the country.
An analysis of the first quarter Pioneer Status Incentive report obtained from the Nigeria Investment Promotion Commission showed that while the requests of 10 firms were denied, three companies had their applications approved-in-principle, while six firms were granted PSI for a three-year period.
The report also revealed that 33 firms are currently benefitting from the tax incentive scheme, while the requests of 132 companies were still pending.
The ten firms whose applications were rejected are Fountain Manufacturing Company Limited, Echostone Development Nigeria Limited, Al-Hamsad Rice Mill Limited, Benchmark Constructions Limited, Super Packaging Limited, Royal Foam Products Nigeria Limited, ENGIE Fenix Nigeria Limited, Flour Mills of Nigeria Plc, Envoy Hotel Limited and Flutterwave Technology Solutions Limited.
Further analysis of the NIPC report revealed that these companies were denied tax exemptions for reasons like ineligibility of business activities and late submission of applications.