In a bid to encourage foreign investments, the Nigerian Investment Promotion Commission (NIPC) announced the approval of tax holidays for 34 companies seeking incentives and waivers under the Industrial Development Income Tax Act in 2023. Lovina Kayode, the head of incentives administration, disclosed this during an end-of-year press briefing in Abuja.
Tax incentives, a subject often scrutinized due to the significant revenue loss attributed to annual waivers, are designed to attract foreign capital into the country. The Federal Government, acknowledging the magnitude of tax incentives, had previously stated that companies operating in Nigeria receive tax incentives worth N6tn annually.
Kayode addressed concerns, stating that not all companies receive tax breaks, and the commission follows stringent procedures to ensure that incentives are granted to deserving and qualified companies. The pioneer status incentive, allowing companies three years of exemption from corporate income tax, is aimed at promoting increased investments.
She emphasized the importance of balancing incentives with the country’s overall gains, asserting that tax expenditure from granting pioneer status incentives is relatively small compared to the economic benefits derived from encouraging qualified companies.
The NIPC plans to publish impact reports next year, assessing the effectiveness of pioneer status incentives in terms of job creation and economic activities. Lovina Kayode highlighted the commission’s commitment to ensuring that the incentives granted have a positive impact on the country.
Aisha Rimi, the Executive Secretary of the commission, reiterated her commitment to facilitating and assisting investors in gaining entry into the country in the coming year. She emphasized the need for intentional efforts to support investors, recognizing the competitive landscape with other nations vying for foreign investments in Nigeria.