News
Dangote Fertilizer, 10 others request tax holiday extensions in Q2 2024
Dangote Fertilizer, 10 others request tax holiday extensions in Q2 2024
Dangote Fertilizer and ten other companies are requesting extensions for their Pioneer Status Incentive (PSI) from the Nigerian Investment Promotion Commission (NIPC) in Q2 2024. The NIPC’s Q2 2024 report, detailing applications processed between April and June, disclosed this information.
These requests occur amid reports that the federal government is considering a review of the tax waiver program, possibly phasing out the PSI. Among the notable companies seeking extensions are CCETC Limited, Nest OGB Limited, Sonata Agri International Limited, West African Cubes Limited, 11 Plc, and Aarti Steel Pipe Mills Limited, alongside Don Mac Limited, Resource Improvement and Manufacturing Company Limited, Top Polymers Nigeria Limited, and CSS Global Integrated Farms Limited. These firms operate across agriculture, manufacturing, and industrial sectors.
In this quarter, Aurables Ventures Limited and West African Soy Limited were granted extensions, although none of the companies requesting extensions in Q2 2024 received approval. This situation underscores the reliance of these companies on tax incentives for their operations and growth.
The pioneer status incentive offers qualifying companies a three-year tax holiday from corporate income tax, as set by the Industrial Development Income Tax Relief Act of 1971. The tax holiday can be extended for one or two additional years to help these industries achieve profitability. Eligible companies or products for the PSI must not already exist in the country.
Nairametrics previously reported that the federal government, through the NIPC, granted principle approvals for six additional companies to receive a three-year tax holiday under the PSI initiative. Last year, the NIPC approved tax holidays for 34 companies, and between 2021 and 2022, around 71 firms benefited from N390.26 billion in incentives.
Recently, a Joint Committee with members from the NIPC and the Federal Inland Revenue Service (FIRS) was established to review existing PSI guidelines, assess the costs to Nigeria, and recommend changes to its qualification and administration. The Taiwo Oyedele-led Presidential Committee on Fiscal Policy and Tax Reforms aims to replace the current PSI with priority sector incentives based on economic investments while honoring existing exemptions until their expiration.
