The Federal Government of Nigeria has by Official Gazette No. 84, Vol.104 of 2017 (“the Gazette”) published a comprehensive list of pioneer industries and products (“the pioneer list”) referenced S.I. No. 24 of 14 August 2017, and effective from 7 August 2017.
The pioneer list comprises 99 pioneer industries (which include the extant pioneer industries and 27 new industries approved by the Federal Executive Council in August 2017) in the following major sectors of the economy:
2. Mining and Quarrying
4. Electricity and Gas Supply
5. Waste Management
8. Information and Communications
9. Professional Services
10. Financial Services
11. Administrative Services
Pioneer status is a fiscal incentive provided under the Industrial Development (Income Tax Relief) Act, Cap I7, Laws of the Federation of Nigeria, 2004, and administered by the Nigerian Investment Promotion Commission (NIPC). The incentive entitles eligible companies to income tax holiday for up to five (5) years – three (3) years in the first instance, renewable for an additional maximum period of two (2) years. In addition to income tax holiday, pioneer companies enjoy other benefits, such as exemption of dividends paid out of pioneer profits from withholding tax.
The review and expansion of the pioneer list by the Federal Executive Council (FEC) is a welcome development that aligns with its objective of economic diversification through acceleration of the growth of the non-oil sector of the economy. The expansion of the list is expected to stimulate the interest of investors in the new pioneer industries and attract the much-needed private capital to the economy. It is also expected that the NIPC will continue to streamline its processes to ensure timely approval of application by eligible investors for the incentive.
We encourage investors to review the pioneer list, evaluate their eligibility for the incentive and seek professional guidance as necessary.
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