The application of 33 companies seeking pioneer status under the Industrial Development Income Tax Act in 2021 has been granted by the federal government.
The Nigeria Investment Promotion Commission disclosed this in its quarterly PSI report.
The PSI reports revealed that investments made by the 33 companies during the year amounted to N543.88bn.
It said the government rejected the applications submitted by 10 investing firms including the popular FinTech, Flutterwave, during the review period.
The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.
The incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy.
According to the PSI report, while the requests of 10 firms were denied, three companies had their applications approved in principle, while six firms were granted PSI for a three-year period.
The report also revealed that 33 firms were benefitting from the tax incentive scheme in Q1, while the requests of 132 companies were still pending.
As at March 31, 2021, the firms granted tax reliefs invested a total of N45.5bn in the Nigerian economy.
The PUNCH had reported in July that Flutterwave was one of the ten companies denied PSI in Q1 2021.
Flutterwave had in February 2022, disclosed that its valuation rose to $3bn, after it was able to raise $250m from a Series D funding round.
At $3bn, using an exchange rate of N570 to one dollar, it means Flutterwave’s valuation is approximately N1.71tn.
A cursory look at the second quarter PSI report for the year 2021 showed that the government granted tax holidays to eight firms who invested an aggregate of N12.8bn.
Seven firms got approval in principle while no application was denied in Q2, the NIPC said.
The report also revealed that 31 firms were benefitting from the tax incentive scheme, while the requests of 160 companies were still pending.
The NIPC also revealed that the government granted approval in principle to 16 firms, 168 applications were pending and 35 companies were benefitting from the government’s tax incentive in Q3.
