…as beneficiaries hit 37
Twenty-eight firms from different sectors of the economy have filed fresh applications to the Nigerian Investment Promotion Commission (NIPC) for tax holiday. The commission disclosed this in its Q3 Pioneer Incentive Status report just released.
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. 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. According to the NIPC report, the companies that applied for the incentive in the third quarter of this year include Haske Solar Company Limited, ENGIE Fenix Nigeria Limited WTES Project Limited, Nascon Allied Industries Plc, DCP Cement Limited, Okpella Cement Plc, CPGNL Limited, and Ecovista Industries PVT Limited.
Others are North-South Gurara Energy Company Limited, Rex Care Limited, Dapon Doors Limited, Eddie Sanitary Wares Limited, Palazzo Versace Hotel and Suite Limited, Italy Ceramic Company Limited, Kiara Rice mills Limited, Spul Sub 1 Limited, Spul Sub 2 Limited, Jigawa Rice Limited, The Envoy Hotel Limited, Koko Beach Hotels and Resort Limited, Barging Marine Solutions Limited, Dicon-Sur Corporate Wear Nigeria Limited, Dukia Gold & Precious Metals Refining Company Limited, Eminent Quarry Limited, Energy Company of the Future Limited, Coscharis Farms Limited, Ellah Lakes Plc, and Ebeosi Limited The commission, however, disclosed that none of the new applicants had been granted approval as they are yet to make presentations to the investment agency. Aside from the new applicants, the commission said three companies had also filed for an extension of their tax holiday within the third quarter.
In total, 102 applications for tax holidays are said to be pending as of September end. Meanwhile, the commission disclosed that 60 other companies, who had earlier applied for the tax relief, had abandoned their application. According to NIPC, their applications were classified as abandoned during the quarter as the Commission had not received any response in over nine months to requests for additional information.
NIPC in the report stated that the number of companies benefitting from the tax incentive stood at 37. The Commission said the 37 companies current ly benefitting from tax exemption have invested over N1 trillion in the economy while the total figure of their employed staff stood at 7,755. Some of the companies with massive investments include ATC Nigeria Limited, a telecom infrastructure company, which is said to have invested N260.3 billion and employed 197 people; Jabi Mall Development Company Limited with N123.7 billion investment and 170 employed staff.
This was followed by Cross River-based Lafarge Africa Plc, which invested N120.8 billion with 71 staff. Others are, Unicane Industries Limited with N31 billion investment and 32 employees; Wacot Rice Limited with N18.4 billion investment and 154 employees; Owerri Mall Development Company Limited, which has invested N16.2 billion and provided employment for 206 people; and Asaba Mall Development Company Limited with N13.4 billion investment and 200 employees, among others. In 2015, the Federal Government had placed an administrative suspension on the processing and issuance of PSI. The Government, however, lifted the suspension in August 2017 and 27 new industries and products were included in the Scheme.
Since the lifting of the suspension, there has been increased participation of both indigenous and foreign investors in the Scheme. Meanwhile, aside from the Federal Government incentive which is aimed at encouraging more investments, all the 36 states of the federation are rolling out various tax incentives under a new initiative aimed at stimulating economic recovery and cushioning the impact of the coronavirus (COVID-19 pandemic on businesses.
This, however, comes with a reward of $2.5 million for each state under the Federal Ministry of Finance Budget and National Planning (FMFBNP) World Bank $750 million States Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme for Results.
The World Bank at a recent webinar had noted that such waivers for businesses are no longer optional, but have become an essential element of governments’ stimulus-targeted packages to facilitate recovery for businesses who face a liquidity crisis, and individuals whose livelihoods have been adversely impacted by the COVID-19 crisis.