The Nigerian government has approved tax reliefs for startups, a step to further improve the nation’s digital and entrepreneurial space.
The approval will see startups through positive growth, create jobs and diversify the economy.
The technical assistant to the Minister of Central and Digital Economy, Femi Adeluyi, made the disclosure in a statement on Friday.
It said the Federal Executive Council gave the approval on Wednesday after a presentation of a memo by Isa Pantami, Nigeria’s Communications Minister.
“The approval will enable the implementation of strategies to encourage and support the development and growth of more Innovation-Driven Enterprises (IDEs), which have the potential to create millions of additional jobs in the country,” the statement said.
This will also help to develop innovative solutions to societal problems, and rapidly grow, as well as diversify the Nigerian economy, in line with the National Digital Economy Policy and Strategy (NDEPS) for a Digital Nigeria, the government said.
Nigeria’s startup ecosystem has recorded impressive progress and received about 35 per cent of $4 billion funds raised by African startups. It has created jobs.
Jumia, an indigenous e-commerce company, provides over 3,000 direct jobs, according to Jobberman’s 2020 Digital Sector Report.
The report said by 2025, Nigeria’s digital economy is expected to create about 1.3 million tech-enabled jobs across industries.
The government mandated ministries, agencies and departments to prioritise granting tax reliefs to startups. The MDAs are the Federal Ministry of Finance, Budget and National Planning and the Nigerian Investment Promotion Commission (NIPC).
Others are the Nigerian Copyright Commission, the Trademarks Registry, and the Patents and Designs Registry. The agency will work with the National Information Technology Development Agency (NITDA) in developing an intellectual property framework for the technology and innovation sector within two months.
It recommended that incentives such as the Pioneer Status Incentive (PSI) Scheme should be provided to the sector.
Then Bureau of Public Procurement (BPP) will collaborate with NITDA to develop a framework that will ensure the involvement of technology innovation startups in government procurement processes.
“The Nigeria Startup Bill (NSB) was earlier approved by the Federal Executive Council and forwarded to the National Assembly and the process is about 90% complete. The approval of the incentives at the Council will consolidate the gains recorded for far in the NSB process,” the statement said.
“The implementation of the National Digital Economy Policy and Strategy (NDEPS) emphasises the importance of the innovation and startup ecosystem to the development of an indigenous digital economy.”
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