The Federal Government has rejected the application of 10 companies seeking pioneer status under the Industrial Development Income Tax Act in Q1 2021.
A report by the Nigeria Investment Promotion Commission (NIPC),which covered those entities that applied for the fiscal relief in the quarter under review, showed that applications of Flour Mills of Nigeria Plc, Royal Foam Products Nigeria Limited, Fountain Manufacturing Company Limited, Echostone Development Nigeria Limited and Al-Hamsad Rice Mill Limited, were not approved.
Other entities that had their applications unapproved include Benchmark Constructions Limited Super Packaging Limited, ENGIE Fenix Nigeria Limited, Envoy Hotel Limited and Flutterwave Technology Solutions Limited .
The NIPC report showed that the affected companies were denied tax exemptions for various reasons, ranging from ineligibility of business activities for which incentives were sought to late submission of their applications.
The businesses are engaged in manufacturing of grain products, production of mattresses, soap making, real estate development, rice milling, manufacturing of woven sacks, solar power generation, and online payment services.
However, the fiscal authorities approved tax holiday for between January and March this year to six other entities, namely granted Pan African Towers Ltd, African Foundries Ltd, Aarti Rolling Mills Limited, Princess Medi-Clinics Nigeria Ltd, Medlog Logistics Ltd and Tiamin Rice Ltd, three companies had their applications approved-in-principle, while six firms were granted PSI for a three-year period.
The Council further reported that 33 companies were currently benefitting from the tax incentive scheme, while the requests of 132 others were still pending.
The pioneer status, which may be fully or partially granted by government, is an incentive that exempts companies pioneering investments in some key sectors of the economy from paying income tax for a certain period.
Essentially, the products of companies eligible for this pioneer status are that not produced or do not already exist in the country.
The NIPC Executive Secretary, Yewande Sadiku, had earlier maintained that the commission had partnered the private sector to harness potential investments in the country.
She listed some of the key sectors with huge investment returns potential as agriculture, transportation, solid minerals and manufacturing, adding that government is working to boost the country’s rating in the area of ease of doing business.