NIPC Seeks to Audit Pioneer Incentive Regime to Boost Impact on Economy

The Nigerian Investment Promotion Commission (NIPC) has said efforts are underway to conduct an impact assessment of companies that have so far benefitted from the federal government’s pioneer incentive programme.

The commission’s Head, Incentives Administration, Lovina Kayode, said it would evaluate the extent to which the beneficiary companies have supported job creation which is part of the conditions for granting tax rebate to companies under the scheme.

She said the incentive programme remained a laudable initiative only if he beneficiary firms make the desired impact in the economy.

Speaking during a press briefing, sh said 34 firms had benefitted from the incentives regime over the past two years.

Kayode, however, noted that the commission was being cautious on granting further incentives to companies that will make no impact, hence the need to review the policy to make the programme more impactful going forward.

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

She said the scheme was also an instrument for attracting more investments into the country.

She said, “The process is stringent because our parent ministry and the Federal Inland Revenue Service are involved to make sure the right investors get this incentives.”

According to her, in 2023, the commission approved tax holidays for 34 companies seeking tax incentives and waivers under the Industrial Development Income Tax Act.

She said 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 into the country.

She said the process is stringent because our parent ministry and the FIRS are involved to make sure the right investors get the incentive.

She said, “However, tax expenditure which means what the 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.”