FG Moves to Reduce Tax Waivers as Dangote, 70 Others Get N390 Billion in Incentives in Two Years
- The Nigerian Government granted about 71 companies tax waivers to the tune of N390 billion in two years
- The top beneficiary companies are in manufacturing, healthcare, waste management and agriculture
- The Nigerian Government said it will work to reduce tax waivers granted to companies under the regulatory requirements
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About 71 companies received N390.26 billion in pioneer status waivers in two years from the Federal Government.
Data from the Federal Inland Revenue Service (FIRS) annual reports revealed that pioneer status incentives consumed N1.43 billion in 2021 and N388.8 billion in 2022.
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Tax waivers given to new companies or products in Nigeria
Through the Nigerian Investment Promotion Commission (NIPC), the Federal Government grants waivers to firms with pioneer status.
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The tax incentives align with the Industrial Development Income Tax Relief Act, No. 22 of 1971, and boost industry investment.
The tax waivers give qualifying companies and products relief from corporate income tax payments and are for the initial period of three years and could be extended to two or more years.
The products and companies that qualify for the status still need to be created in the country.
46 companies listed for tax waivers in 2021
Punch reports that the 2022 second quarter report by NIPC disclosed that about 71 companies benefited from the incentive.
At the end of 2021, about 46 firms benefitted from the tax incentive programme, while 186 requests were pending.
The development means there will be an additional 25 beneficiaries of the incentives in the next six months.
Eligible companies and sectors
The eligible beneficiaries operate in manufacturing, solid mineral, healthcare, ICT, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure.
The beneficiary companies include Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, and Stallion Motors Limited.
Others are African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Limited.
Others included Aarti Rolling Mills Limited, Von Automobile Nigeria Limited, Ikorodu Steel Mills Limited, Confluence Metals Fabrication Company Limited, Cormart Nigeria Limited, Tiamin Rice Limited, Outsource Global Technologies Limited, Crown Flour Mills Limited, Elvis Hotels Nigeria Limited, Olam Hatcheries Limited, among others.
The Nigerian Government had disclosed plans to review and cut down tax waivers to companies operating in Nigeria.
FG to review tax waivers to companies
Taiwo Oyedele, the Tax Reform and Fiscal Policy Committee Chairman, said Nigeria will audit the tax waiver in line with the previous administration's plan.
In September, the International Monetary Fund (IMF) asked Nigeria and other Sub-Saharan African countries to eliminate tax exemptions and channel domestic revenue to their fiscal deficits.
The Fund stated that the approach is better than reducing fiscal expenditure, which could harm economic development.
The body stated that domestic revenue is less harmful to growth in countries with low initial levels. At the same time, the cost associated with reducing expenditure is high as Africa battles with an enormous need.
"Learn from India": Dangote lectures FG as subsidiaries remit N474 billion in taxes to FG in 3 Years
Legit.ng reported that Dangote Industries Limited enhanced Nigeria's revenue with tax payments of about N474 billion in three years.
Dangote Cement, Dangote Sugar Refinery Plc, and NASCON Allied Industries, subsidiaries of Dangote Industries Limited, are all quoted on the Nigerian Exchange Limited.
An analysis of the remittances showed that Dangote Cement Plc, Africa's largest Cement producer, accounted for 87.2% of the money, paying about N412 billion into the treasury of the Nigerian government in three years consecutively.
Source: Legit.ng
