In a bid to bolster Economic Growth and development, the Nigerian Investment Promotion Commission (NIPC) has disclosed that a total of 34 companies have been granted a Tax exemption for a period of three years in 2023. The aim behind this initiative is to stimulate investment opportunities and uplift the overall economic landscape. The Incentives Administration Department of the NIPC enforces the pioneer status incentive (PSI), which grants qualifying industries and products a three-year tax exemption. This tax holiday provides relief from corporate Income Tax for the initial three years, and it can be extended for an additional year or two.
During a press conference held at the NIPC headquarters in Abuja, Mrs. Lovina Kayode, the Head of Incentives Administration, made an announcement. She stated that the commission has established rigorous procedures for granting waivers and incentives, which leads to only select companies being eligible for these awards. However, She acknowledged that tax incentives were introduced to ramp up foreign investments in the country despite the persistent dispute arising from the substantial Revenue losses caused by annual waivers granted.
Government experienced a loss in terms of tax expenditure.
Further speaking, her statement conveyed the strictness of the process, as well as the involvement of the Federal Ministry of Industry, Trade and Investment and the Federal Inland Revenue Service in ensuring that only deserving Investors receive this incentive. In the past year, 34 applications have already been approved. However, she unveiled that prioritising granting incentives exclusively to deserving companies is crucial, which is one of the main objectives. Nevertheless, there exists the prevailing belief that Nigeria excessively grants waivers, incentives, and concessions.
On the other hand, she explained the loss incurred by the government in terms of tax expenditure due to the provision of pioneer status incentives is relatively insignificant when compared to the substantial benefits reaped by the country through the provision of these incentives to eligible businesses. Additionally, she added that the commission’s intentions are to release the impact assessment reports that evaluate the effectiveness of the pioneer status program in generating employment opportunities and fostering various economic activities that stimulate investments.
Investors should be encouraged to find a way into the country.
However, NIPC has set an important goal for the upcoming year, which is to conduct a comprehensive assessment of the impact they’ve made. One of their major tasks will be evaluating the extent to which the incentives they provided have contributed to job creation in the country. She added that there is a curiosity about the number of employment opportunities generated by these companies and the extent to which import substitution has been achieved through the incentives granted. She revealed her interest in knowing the financial gains that the government would accumulate after three years of these tax exemptions.
Also, in her virtual speech, Aisha Rimi, the Executive Secretary of NIPC, expressed her unwavering dedication to supporting and enabling investors to establish themselves in the country in the upcoming year. She emphasised the significance of teamwork and reliance on the continued support of others to effectively promote the commission’s endeavours as she acquaints herself with the system. The primary purpose of establishing the commission was to enhance, encourage, and aid investors in finding their way into the country while also supporting those who are already established within its borders.
Government assured investors of advantageous experience within the country.
She concluded that in order to prevent other countries from surpassing Nigeria, it is imperative that it does not neglect or hinder the individuals who require support. It is essential that they adopt a purposeful approach. The responsibility lies in connecting the Private Sector and the government to guarantee that both foreign and domestic investors, as well as those already present in the country, have a rewarding and advantageous experience with their economic activities in Nigeria.
