New industries to operate tax-free for 3 years

Dr. Okechukwu Enelamah, Minister of Industry, Trade and Investment
Dr. Okechukwu Enelamah, Minister of Industry, Trade and Investment

The federal government has 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 Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, told journalists yesterday in Abuja that the pioneer status initiative seeks to enhance the survival, profitability and sustainability of beneficiary companies.

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.

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Pioneer Status Incentive is a tax holiday which grants qualifying industries and products relief from the payment of corporate income tax for an initial period of three years, extendable for one or two additional years as provided for under the Industrial Development (Income Tax Relief) Act, No 22 of 1971 (IDA).

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.

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