The federal government has declined applications from 10 companies seeking pioneer status under the industrial development income tax relief Act (IDITRA).
This is according to the Nigerian Investment Promotion Commission (NIPC) report on pioneer status incentive (PSI) applications for the first quarter of 2021 (Q1 2021).
The PSI is a tax holiday that grants qualifying industries and products relief from payment of corporate income tax for an initial period of three years, extendable for one or two additional years.
According to NIPC, the pioneer industries eligible for this tax incentive are agriculture, mining and quarrying, manufacturing, electricity and gas supply, waste management, construction, trade, information and communication, professional services, financials, and administrative services.
The companies whose applications were declined include Fountain Manufacturing Company (soap), Echostone Development Nigeria (real estate), Al-Hamsad Rice Mill (rice milling), Benchmark Constructions (real estate), Super Packaging Limited (woven sacks).
Others are Royal Foam Products Nigeria (mattress), ENGIE Fenix Nigeria (solar), Flour Mills of Nigeria (grain products), Envoy Hotel (hotel), and Flutterwave Technology Solutions (online payment).
According to the report, Echostone’s application was rejected due to a contract project not allowed under IDITRA; while Benchmark Constrictions did not comply with the documentary requirement for PSI approval.
Royal Foam and Flour Mills applications were rejected because it was not eligible under IDITRA (expansion project); and Fountain Manufacturing and Super Packaging Limited was because its activities are not in the PSI list.
Meanwhile, Al-Hamsad Rice Mill, ENGIE Fenix, Envoy Hotel, and Flutterwave applications were time barred.
The federal government granted tax holidays to six companies which are Pan African Towers, African Foundries, Aarti Rolling Mills, Princess Medi-Clinics Nigeria, Medlog Logistics, and Tiamin Rice.
These firms had invested N45.5 million into the economy as at March 31, 2021.
According to the report, 17 companies had their applications approved-in principle, meaning these firms are subject to the payment of application fees and will only take effect (application) after the payment of such fees.
The report further disclosed that there are 33 current PSI beneficiaries, including Dangote Sinotrucks West Africa and Honeywell Flour Mills; while the applications of 132 companies are pending.