The Federal Executive Council on Wednesday approved the inclusion of 27 enterprise to the list of pioneer industries and products that would enjoy pioneer status under the Industrial Development Income Tax Relief Act. Through this they would enjoy tax holidays for three years, which would enable them grow and expand investments.
The list was last reviewed in 2006 and the approval was to bring the industrial policy of the country to global best practices.
The Minister of Industry, Trade and Investment, Okechukwu Enelamah, gave the hint while addressing State House Correspondents on the decisions of FEC.
The Minister of Industry, Trade and Investment, Okechukwu Enelamah, gave more details about the scheme, while addressing State House Correspondents on the decisions of FEC.
Here’s all you need to know about it:
- The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.
- The list was last reviewed in 2006 and the approval was to bring the industrial policy of the country to global best practices.
- In reviewing the pioneer status scheme, attention was paid to the administration’s economic recovery and growth plan and to capture the current realities that would enable the realisation of the growth plan.
- The whole purpose is to give tax holidays to industries that are considered pioneer, not mature, to enable them to grow and attract investment.
- One of the highlights of the policy, according to him, is that where there is bulk purchase of major items that will be brought into the country, those who normally would have supplied from outside the country will now come to Nigeria and establish their factories to produce locally.
- Firms would offer job opportunities to Nigerians and pay taxes to the government, among other benefits.
- Firms covered by the pioneer industries’ list would enjoy tax holidays ranging from three to five years.
- The whole idea of the incentive is to attract people to invest more in sectors. It will help to increase our tax revenue instead of the reverse.
- The pioneer status is an incentive would enable new industries to enter the market, enter new industries and invest more for those already in.
- The Federal Executive Council have removed all ambiguities in the definition of industries by reclassifying industries according to the international standard industrial classification, which is the same standard used by the Nigerian Bureau of Statistics.
- Agreement has been made that the pioneer list would be reviewed every two year, and in the case of additions to the list, it will be affected immediately.
- In case of deletion from the list, there will be a three-year window that will be allowed for those investing in that industry and enjoying pioneer status to carry on till the end of that three-year period.
- The mineral oil prospecting, already governed by the petroleum profit tax is not part of the pioneer industries, same for the cement where the country already has already become net exporters.
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