Dangote and 106 other individuals or entities have been granted a tax holiday as an incentive for their investments totaling N2.5 trillion.
Around 107 companies, including Dangote and Mikano International, are currently benefiting from tax exemptions from the Federal Government, despite its expressed intention to discontinue such programs and improve its revenue base. The number of beneficiaries enjoying Pioneer Status under the Industrial Development Income Tax Act increased by 24 from 83 in the first quarter of 2023 to 107 by the fourth quarter of the same year, according to reports from the Nigerian Investment Promotion Commission. While 79 firms submitted new requests, 211 are still pending, and 56 companies had their applications approved in principle.
19 firms received incentive extensions for another three years until 2026
Additionally, 19 firms received incentive extensions for another three years until 2026. The pioneer status provides tax exemptions for a specified period to encourage investments in the economy, covering products or companies not already present in the country. The companies benefiting from this status operate across various sectors, including manufacturing, pharmaceuticals, information and communication, construction, and tourism. The government has declined applications from five investing firms.
Tax incentives have sparked debates due to the substantial revenue loss associated with waivers granted annually. The government has expressed plans to review and reduce tax waivers, citing an estimated N6 trillion in tax incentives given to companies operating in Nigeria annually. Despite this, officials maintain that these incentives are crucial for attracting foreign investments into the country and have emphasized stringent procedures in granting waivers.
There are plans to publish impact reports assessing the effectiveness of these incentives on job creation and other economic activities to promote investments. Economic experts have stressed the importance of tax waivers in driving economic growth but have raised concerns about transparency and objectivity in granting them.
