The federal government on Monday announced a list of 27 new industries that qualified for tax holiday after lifting the administrative suspension on processing Pioneer Status Incentives (PSI) applications.
The Ministry of Industry, Trade and Investment said the decision to lift the suspension followed the conclusion of critical reforms to the incentive regime aimed at promoting investments in the country.
The Minister, Dr. Okechukwu Enelamah, while speaking with journalists yesterday in Abuja said that the pioneer status initiative seeks to enhance the survival, profitability and sustainability of beneficiary companies.
The ministry also released new guidelines for PSI applications as well as a revised list of industries and products qualified for conferment with the pioneer status.
The industries added are: Mining and processing of coal; Processing and preservation of meat/poultry and production of meat/poultry products; Manufacture of starches and starch products; Processing of cocoa; Manufacture of animal feeds; Tanning and dressing of Leather; Manufacture of leather footwear, luggage and handbags; Manufacture of household and personal hygiene paper products.
Others are: Manufacture of paints, vanishes and printing ink; Manufacture of plastic products (builders’ plastic ware) and moulds; Manufacture of batteries and accumulators; Manufacture of steam generators; Manufacture of railway locomotives, wagons and rolling stock; Manufacture of metal-forming machinery and machine tools; Manufacture of machinery for metallurgy; Manufacture of machinery for food and beverage processing; Manufacture of machinery for textile, apparel and leather production.
The rest are: Manufacture of machinery for paper and paperboard production; Manufacture of plastics and rubber machinery; Waste treatment, disposal and material recovery; E-commerce services; Software development and publishing; Motion picture, video and television programme production, distribution, exhibition and photography; Music production, publishing and distribution; Real estate investment vehicles under the Investments and Securities Act; Mortgage backed securities under the Investments and Securities Act; and Business process outsourcing.
Pioneer status is a tax holiday granted by government to companies interested in investing in difficult sectors of the economy with the understanding that profits from their operations would be ploughed back to the business, to create jobs and boost the growth of the economy.
The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act to allow tax holidays to be granted industries not necessarily engaging in pioneering activities, but considered by government not mature and requiring support to grow.
Under the current arrangement, pioneer status grants a beneficiary company an initial three years tax holiday, subject to additional one, or maximum two years renewal, making a total five years.
The Executive Secretary of the Nigerian Investment Promotion Council (NIPC) Ms Yewande Sadiku, said: “The reforms have brought further clarity, predictability and process efficiency to the PSI regime. We will continue the reform process as we plan to take the PSI application process online. We will also engage with relevant stakeholders with a view to updating the existing legislations.”
The suspension was placed on the processing of PSI applications in September 2015, to allow for a comprehensive review and reform of the incentive regime.