FEC exempts 27 companies from paying taxes for 3 years
- Okechukwu Enelamah, the minister of industry, trade and investment, stated that the tax break was given to pioneer companies- excluding mineral oil and cement firms- to aid them attract investment
- The minister disclosed that the initiative is governed by the Industrial Development Income Tax Relief Act
- A review process will be carried out every two years to reflect new realities; and companies added to the list will benefit from the initiative
A three-year tax holiday was approved for 27 new industries and products, by the Federal Executive Council on Wednesday August 2, The Cable reports.
The development was made public by the minister of industry, trade and investment Okechukwu Enelamah.
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The minister disclosed that the move was made in order to enable the companies grow and expand.
He stated: “The FEC gave approval to a memorandum that was presented to amend the list of pioneer industries and products that will enjoy pioneer status going forward.
“The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.
“The whole purpose of it is to give tax holidays to industries that we consider pioneer, not mature, to enable them to grow and attract investment in them.”
“We have tried to remove all ambiguities in the definition of industries by reclassifying industries according to the international standard industrial classification, which is the same standard used by the Nigerian Bureau of Statistics.
“We also agreed that the pioneer list should be reviewed every two years and that in the case of additions to the list, it will be affected immediately.
“In case of deletion from the list, there will be a three-year window that will be allowed for those investing in that industry and enjoying pioneer status to carry on till the end of that three-year period.
“Against this backdrop, we then approved 27 industries that were recommended for addition to the pioneer list.”
According to Enelamah, the list would eventually be made public.
He stated that mineral oil and cement firms are not included among the pioneer industries.
This is because Nigeria is already a net exporter of cement, and mineral oil is already governed by the petroleum profit tax.
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Meanwhile, Legit.ng previously reported that the minister for science and technology, Ogbonnaya Onu, disclosed that a state of emergency has been declared in the sector, by the Federal Executive Council.
The move was reportedly made because the Economic Recovery and Growth Plan of the Buhari administration recognized the cardinal place of science and technology in driving the economy.
Watch this Legit.ng TV video asking Nigerians to state what Buhari should tackle first when he returns