- In a bid to boost tax revenue, the Federal Government of Nigeria is planning to phase out tax exemptions for established companies. The President, Major General Muhammadu Buhari (retd.) has sent the 2022 Finance Bill, to the National Assembly for approval.
In a bid to boost tax revenue, the Federal Government of Nigeria is planning to phase out tax exemptions for established companies. The President, Major General Muhammadu Buhari (retd.) has sent the 2022 Finance Bill, to the National Assembly for approval.
According to reports, almost 172 companies stand to lose tax benefits. The latest PSI report released by the Nigeria Investment Promotion Commission, reveals that 172 companies have applied for tax incentives. The list includes large as well as small companies. The bigger players are Dangote Coal Mines Limited, Seven/Up Bottling Company Limited, Mikano International Limited, AA Rano Nigeria Limited, CCECC Nigeria Limited, Corinthia Villa Hotel & Suites Limited, and Red Star Oil and Gas Limited.
The government had already announced earlier its intention to remove the tax incentives effective from 2022, amounting to N2.4tn tax waivers under the Pioneer Status Incentive and other tax exemptions. The pioneer status offered by the Federal Government exempts companies from paying income tax fully or partially for a certain period. The Industrial Development Income Tax Act, with tax reliefs for a three-year period, was aimed at stimulating investments in the economy and encouraging investment in new sectors. The beneficiaries of this tax incentive include sectors such as manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure.
The proposed removal of the tax incentive is expected to impact companies operating in 71 industries or sectors that are eligible for Pioneer Status Incentive. The sectors include manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure.
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Explaining the move by the government, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the objective of the bill was to support the implementation of the 2023 budget.
