The Nigerian Investment Promotion Commission (NIPC) said it approved tax holidays for 34 companies seeking tax incentives and waivers under the Industrial Development Income Tax Act, in 2023.
Head of incentives administration, Lovina Kayode, made this known at an end-of-the-year press briefing organised by the commission in Abuja.
She explained that not all companies are granted tax breaks due to stringent procedures followed by the commission in awarding waivers, adding that tax incentives which had been a contentious issue due to the high amount of revenue lost to waivers granted every year, were meant to boost foreign investments in the country.
Kayode explained that the pioneer status incentive is a stimulus that allows a company to get three years of not paying corporate income tax, just to get more investments and that the process is stringent because of the parent ministry and the federal inland revenue service which are involved to make sure the right investors get this incentive.
“So far this year, we granted 34 applications have been approved and one of the things we intend to do is to ensure we are not just giving incentives to undeserving companies. However, there is already a notion that Nigeria gives out too many waivers, incentives, and concessions,” she stated.
She further explained that tax expenditure which means what government has lost by granting pioneers status incentive is just a small amount compared to what the country gains by granting these incentives to qualified companies.
Kayode said the commission would soon publish impact reports on the effectiveness of the pioneer status report on job creation and other economic activities to promote investments.
“How many jobs are the companies creating and what kind of import substitution has come about because we have granted these incentives and how much would the government gain after the three years of them not paying these taxes,” she added.
Executive Secretary of the commission, Aisha Rimi, who joined virtually, said the commission will continue to give companies the support they need to operate in Nigeria.