Why some companies don’t get tax incentives

The Head of incentives administration of the Nigerian Investment Promotion Commission, Lovina Kayode has explained why some companies are not granted tax breaks due to stringent procedures adopted by the commission.

At the end-of-the-year press briefing organised by the commission at the weekend in Abuja, she explained that the pioneer status incentive is a stimulus that exempts a company from paying corporate income tax, just for three years.

According to her, it is also an instrument to attract more investments.

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 incentive.”

In 2023, the Nigerian Investment Promotion 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 this process is stringent because our parent ministry and the FIRS are involved to make sure the right investors get this incentive.

“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.”

“On impact, that is one thing NIPC is planning on, next year, it is one of our biggest tasks to do an impact assessment. These incentives we gave out, how they have impacted the country in terms of job creation,” she said.