Dangote, Mikano, and 105 other companies enjoys tax incentive and exempted from the Nigerian federal government tax policy despite its insistence on halting the pioneer status program and initiating actions to improve its revenue base.
The pioneer status is a full or partial incentive the Federal Government offers to seclude companies from paying income tax for a certain period.
A report by the Pioneer Status Incentive disclosed the increase in the number of beneficiaries enjoying the Pioneer Status under the Industrial Development Income Tax Act by 24, from 83 firms in the first quarter of 2023 to 107 in the fourth quarter of 2023.
An analysis released by the Nigerian Investment Promotion Commission of the PSI report revealed that 79 firms were newly received, while 211 forms are on the pending list. It also unveiled that 19 firms were granted incentive extensions for another three years to 2026, and 56 companies had their applications approved in principle.
Some of the companies include Dangote Fertilizers, Mikano International Limited, Sinotrucks West Africa Limited, West African Cubes Limited, Jigawa Rice Limited, JMG Nigeria Limited, Rain Oil Limited, Okpella Cement Plc, Greenville Liquified Natural Gas Company Limited and many others.
The 107 companies operating in various sectors, including manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure, made an investment return of N2.49tn.
Tax incentives have raised a pressing issue due to the high revenue lost to waivers. At the same time, the commission officials stood their ground, saying incentives were meant to boost foreign investments into the country.
Mr Taiwo Oyedele, the Chairman of the Presidential Tax Reform Committee, said the committee would carry out a comprehensive tax waiver review in line with the previous administration’s plan.
In response to this, Dr Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, in a statement, said, “The whole idea of incentives is to grow the economy. When you are growing the economy, you are not only looking at revenue, you are looking at employment and multiplier effects. In the medium to long term, you will get this revenue by the time you are able to grow these investments. It is inappropriate to see it as revenue loss unless the incentive policy itself is discriminatory and not in line with tax policies”.
He emphasized on the transparency of the process and perceived it as an initiative for the government to grow the economy.
