Dangote Fertilizer Limited, along with ten other companies, has applied for an extension of their Pioneer Status Incentive (PSI) from the Nigerian Investment Promotion Commission (NIPC).
This was disclosed in the Q2 2024 Pioneer Status Incentive Report released by the NIPC, detailing the applications processed between April and June 2024.
These applications come at a time when the federal government is reportedly considering a review of the tax waiver program with a plan to phase out the PSI.
Other companies seeking extension
The companies seeking the extension include prominent names such as CCETC Limited, Nest OGB Limited, Sonata Agri International Limited, West African Cubes Limited, 11 Plc, and Aarti Steel Pipe Mills Limited.
Others include Don Mac Limited, Resource Improvement and Manufacturing Company Limited, Top Polymers Nigeria Limited, and CSS Global Integrated Farms Limited.
These companies span various sectors, ranging from agriculture to manufacturing and industrial production.
Two companies get extension approval
The NIPC report also shows that two companies, Aurables Ventures Limited and West African Soy Limited, have already received approval for their extension requests during this quarter.
Nairametrics further observed that none of the companies that sought extension in Q2 2024 got an approval.
The extension approvals highlight the continued reliance of these companies on tax incentives to sustain their operations and growth.
What you should know
A pioneer status incentive grants companies making investments in qualifying industries and products a tax holiday of three years from the payment of company income tax.
This tax incentive is in accordance with the Industrial Development Income Tax Relief Act, No 22 of 1971, to boost investment in the industries.
The three-year tax holiday has the possibility of an extension for one or two additional years to enable the industry concerned to make a reasonable level of profit within its formative years.
The products or companies eligible for this pioneer status are meant to be those that do not already exist in the country.
Nairametrics earlier reported that the federal government through the Nigerian Investment Promotion Commission (NIPC) granted approvals in principle to six more companies to benefit three-year tax holiday under its Pioneer Status Incentive (PSI) initiative.
Last year, the NIPC said it approved tax holidays for a total of 34 companies.
Between 2021 and 2022, about 71 companies enjoyed N390.26 billion pioneer status incentives.
The Federal Government recently inaugurated a Joint Committee of staff of the NIPC and the Federal Inland Revenue Service (FIRS) to review the current guidelines for the administration of the PSI, validate the cost of the incentive to Nigeria, and recommend changes to the qualification and administration.
The Taiwo Oyedele-led Presidential Committee on Fiscal Policy and Tax Reforms plans to replace the abused pioneer status with priority sector incentives, rewarding companies based on their investments in the economy. However, existing exemptions will be honoured until they expire.
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