The Federal Government of Nigeria approved the eligibility of 27 additional industries for possible grant of tax holiday under the pioneer status incentive at the Federal Executive Council meeting held on Wednesday, 2 August 2017. Following FEC's approval, the Minister of Industry, Trade and Investment announced on Monday, 7 August 2017, the lifting of administrative suspension on approval of pioneer status incentive (PSI) application.
Companies granted pioneer incentive enjoy tax holiday for an initial period three years and extendable for additional two, subject to meeting the required conditions.
The Federal Government had suspended the grant of PSI in September 2015 to enable a comprehensive review of the incentive scheme due to perceived abuse. Subsequent to this, the National Assembly also, in May 2017, set up an ad-hoc committee to investigate perceived abuses of PSI by companies operating in Nigeria.
The reformed PSI framework has culminated in additional 27 industries and products as well as release of new guidelines for PSI application. This newsletter examines these developments in full detail.
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