Nigeria grants tax holidays to 27 new industries

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The Federal Executive Council on Wednesday approved 27 new industries and products to enter into the pioneer status to give tax holidays to them for three years, to enable them grow and expand investments.

The list was last reviewed in 2006 and the approval was to bring the industrial policy of the country to global best practices.

The Minister of Industry, Trade and Investment, Okechukwu Enelamah, gave the hint while addressing State House Correspondents on the decisions of FEC.

“The FEC gave approval to a memorandum that was presented to amend the list of pioneer industries and products that will enjoy pioneer status going forward.

“The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.

“The whole purpose of it is to give tax holidays to industries that we consider pioneer, not mature, to enable them to grow and attract investment in them,’’ he said.

He said that the list covered a wide range of industries and the tax relief covered three to five years.

Mr. Enelamah said that the pioneer status review attention was paid to the administration’s economic recovery and growth plan and to capture the current realities that would enable the realisation of the growth plan.

He added that there was multi-stakeholder engagement involving the public and private sectors in identifying the industries suitable for the pioneer incentive scheme.

“We have tried to remove all ambiguities in the definition of industries by reclassifying industries according to the international standard industrial classification, which is the same standard used by the Nigerian Bureau of Statistics.

“We also agreed that the pioneer list should be reviewed every two years and that in the case of additions to the list, it will be affected immediately.

“In case of deletion from the list, there will be a three-year window that will be allowed for those investing in that industry and enjoying pioneer status to carry on till the end of that three-year period.

“Against this backdrop, we then approved 27 industries that were recommended for addition to the pioneer list,’’ he added.

The minister stated that the list would be made public, adding that the mineral oil prospecting, already governed by the petroleum profit tax, was not part of the pioneer industries, same for the cement where the country already had become net exporters.

He said that rather than lose revenue, the status was an incentive to enable new industries to enter the market, enter new industries and invest more for those already in, adding that it did not remove tax payments for existing industries.

“This is fairly a well-used policy and carrot by countries and Nigeria had it before but we had to review it because it had not been reviewed since 2006.

“The whole idea is that it is an incentive to attract people to invest more in sectors,’’ he said, adding that most of the agro and agro-processing, industrialization, creative industries, power, science and technology and players should be allowed to have tax incentive.

“It will increase our tax revenue instead of the reverse,” he added.

(NAN)


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  • Real Metrics

    Premium Times Editor,

    Of Buhari’s directionless form of government, let fools contend

    What’s happened in the wake of Muhamadu Buhari’s election is un-educated
    and inartful governance on the fly; close to ignorance, and un-inspired by either
    knowledge or full or organized thinking on any aspect of national economics,
    law and order or planning – but instead a rather confused government scuppered
    by nepotism a first and later on scuttled by Islamist bias which emphasizes Koranic
    verses at the expense of social scientific knowledge of public administration.

    The effect of that ignorance and bias is a staggering 28 million un-employed
    youths now roaming Nigerian streets hungry like predators forced to live by
    plunder or murder.

    Nigeria is not mired in deepening recession for lack of three-year tax
    holiday to private companies, but the country was instead pushed into crushing
    recession by President Buhari’s government’s mostly ignorant wrong-headed
    policies without any discernible priorities. The effect of that ongoing and driftless
    presidential roam is that Nigeria’s economy shrank last year and for the first
    time in 25 years. A tax-holiday to 27 private companies presently in doldrums is
    not the solution.

    • Cogito Ergo Sum

      YEMI OSINBAJO IS A CHARLATAN FIGUREHEAD WHO CANNOT PROPOUND OR ARTICULATE
      ANY ECONOMIC POLICY IN PUBLIC since HE HAS NO KNOWLEDGE OF ECONOMICS TO PLAN
      FOR NIGERIANS. HE’s AS MUCH A WASTE OF SPACE AS MUHAMADU BUHARI WHO HAS NO
      KNOWLEDGE OF ANYTHING. It’s FOR LACK OF KNOWLEDGE THE APC PARTY FLOUNDERS
      INTO COMPLETE MESS AND DROVE NIGERIA AGROUND INTO THE very WORST ECONOMIC
      RECESSION IN HISTORY.

  • Curtx Maccido

    Good one from government but why should 2015/16 application be approved in 2017? That’s already 2 years into the pioneer status…is it the same sluggish processing?