Government lifts suspension on tax holidays for pioneer companies
The Federal Government on Monday formally announced the lifting of the administrative suspension earlier placed on Pioneer Status Incentives (PSI), having concluded critical reforms on its administration.
It also announced the release of new guidelines for PSI applications as well as a revamped list of pioneer industries and products.
The administration of the pioneer status had in recent time come under intense criticism from experts in view of the billions of Naira lost to companies enjoying the status far beyond the maxim stipulated years.
The PSI is expected to grant companies tax holidays to investments in qualifying industries and products for an initial period of three years with the possibility of an extension for one or two additional years.
But experts criticised that many of the firms enjoying the tax holidays do not merit it, as they were not pioneers in their respective industries.
The Minister of Industry, Trade and Investment, Dr Okechukwu Enelama, announced the decision on the lifting of the ban during a media briefing held at the headquarters of the Ministry in Abuja.
Enelama said the new application guidelines provide information on the considerations for assessing new PSI, and extension of applications while it further outlines the application processes and timelines. It also details the ongoing obligations of beneficiaries.
The Federal Executive Council (FEC), at its last meeting approved the lifting of the suspension with new guidelines, and a revamped Pioneer list with the addition of 27 key industries and deletion of two industries at a biennial review of the list.
Enelamah explained that the review of the list of Pioneer industries and products was done to bring it in line with the economic realities of Nigeria, and the Economic Recovery and Growth Plan (ERGP)
According to him, “The Federal Government is committed to encouraging and attracting investments into critical sectors of the economy, which will significantly impact development and deliver key benefits to the country.
The benefits include Economic Growth and Diversification; Industrial and Sectoral Development; Employment; Skills and Technology Transfer; Export Development; and Import Substitution.”
Also in a remark, the Executive Secretary, Nigerian Investment Promotion Council (NIPC) Ms Yewande Sadiku, said the reforms have brought further clarity, predictability and process efficiency to the PSI regime promising. “We will continue the reform process as we plan to take the PSI application process online, we will also engage with relevant stakeholders with a view to updating the existing legislation.”
She explained that an industry or product is designated as pioneer if it is not being carried on in Nigeria on a scale suitable to the economic requirements of the country or not at all. It also includes where there are favourable prospects for further development; or if it is expedient in the public interest to encourage the development and establishment of an industry in Nigeria.