The Federal Government has denied Flour Mills Nigeria Plc, Flutterwave Technology Solutions Limited and eight other companies pioneer status tax waiver under the Industrial Development Income Tax Act in Q1 2021.
The applications of ENGIE Fenix Nigeria Limited, Envoy Hotel Limited, Fountain Manufacturing Company Limited, Echostone Development Nigeria Limited, Al-Hamsad Rice Mill Limited, Benchmark Constructions Limited, Super Packaging Limited, Royal Foam Products Nigeria Limited were also rejected by the agency.
The pioneer status is an incentive offered by the Federal Government which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.
The incentive is generally regarded as an industrial measure aimed at stimulating investments into the economy.
The first quarter Pioneer Status Incentive report released by the Nigeria Investment Promotion Commission (NIPC) showed that three companies had their applications approved-in principle and six firms were granted PSI for a three-year period.
The products or companies eligible for this pioneer status are products or industries that do not already exist in the country.
Further analysis of the NIPC report revealed that these companies were denied tax exemptions for various reasons ranging from ineligibility of business activities for which incentives were sought to late submission of applications.
NIPC said Flour Mills of Nigeria Plc application was denied tax exemption because its expansion projects was not eligible under IDITRA.
While Al-Hamsad Rice Mill Limited, ENGIE Fenix Nigeria Limited, Envoy Hotel Limited and Flutterwave Technology Solutions Limited sent their applications after the time window allowed for submission had closed.
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 and six firms were granted PSI for a three-year period.
The report also revealed that 33 firms were currently benefitting from the tax incentive scheme while the requests of 132 companies were still pending.
The six companies that were granted a tax holiday between January and March are Pan African Towers Ltd, African Foundries Ltd, Aarti Rolling Mills Limited, Princess Medi-Clinics Nigeria Litd, Medlog Logistics Ltd and Tiamin Rice Ltd.
As of March 31, these companies had invested N45.5m into the Nigerian economy.