- The Federal Government rejected several applications from Nigerian companies seeking to get exempted from paying tax
- The affected companies are Flutterwave, Flour Mills, Royal Foam, Super Packaging Limited, Envoy Hotel Limited, Al-Hamsad Rice Mill Limited and more
- Some of the applications were rejected on the ground of late submission, not being eligible for the tax relief, and wrong documents for requirements
Applications of ten companies seeking tax incentives have been rejected by the Nigerian Investment Promotion Commission (NIPC) on behalf of the Federal Government.
The tax incentives allows some companies be exempted from expected taxpayers list for a certain period, which is backed by Industrial Development (Income Tax Relief) Act cap 17, of 2004 and the Pioneer status order of 2017.
For the first quarter of 2021, ten companies were denied, 17 companies received approval in principle, while six firms were given pioneer status incentives for a 3-year period.
It was gathered that companies like Flour Mill of Nigeria Plc, Flutterwave Technology Solutions Limited, Fountain Manufacturing company, Al-Hamsad Rice Mill Limited and Engie Fenix Nigeria Limited were denied the Pioneer Status Incentives (PSI).
Others on the rejected list are Royal Foam Product Nigeria Limited, Echostone Development Nigeria Limited, Benchmark Construction Limited, Super Packaging Limited and Envoy Hotel Limited.
Why the companies were rejected
According to NIPC, Flutterwave, Al-Hamsad Rice Mill Limited, ENGIE Fenix Nigeria Limited and Envoy Hotel Limited applications were rejected due to late submission.
The reason for the rejection of applications from Royal Foam Products Nigeria Limited and Flour Mills of Nigeria Plc was ineligibility, as they had applied based on expansion projects which is not under the Industrial Development Act for tax exemption.
For Benchmark Constructions Limited, the company's application was denied due to non-compliance with requirements for approval - this is despite sending the application since August 2019.
Super Packaging Limited and Fountain Manufacturing Company Limited were informed that their application was rejected based on the activities they applied for, which doesn't have tax exemption.
While for Echostone Development Nigeria Limited, the real estate firm's application was denied in the last month of first quarter, as its contract project was not eligible under the Industrial Development Income Tax Relief Act.
Flutterwave raises funds, hit over $1 billion valuation
The company established by Olugbenga Agboola and Iyinoluwa Aboyeji raised $170 million from several investors in March, taking its total fundraising to $225 million.
Investors such as Avenir Growth Capital, Greycroft, Insight Ventures, Tiger Global Management LLC, 9yards Capital, DST Global and many more participated in the recent fundraising.
This took Flutterwave's market valuation to over $1 billion, making it the first Nigerian tech firm to reach the mark, and one of four African startup to hit a billion-dollar value.