BEVERLY HILLS, August 03, (THEWILL) – The Minister of Industry, Trade and Investment, Okechukwu Enalema, has revealed that the Federal Executive Council (FEC) has approved a three-year tax holiday for 27 new industries and products to serve as an incentive to attract new investors.
Enelamah, who made this known after the FEC meetingon Wednesdaysaid it was done in a bid to enable them to grow and expand investments saying the list would be made public but that mineral oil and cement firms are not part of the pioneer industries as mineral oil is already governed by the petroleum profit tax and Nigeria is already a net exporter of cement.
Enelamah said the status would not make the country lose revenue but instead would enable new industries to enter the market and invest more, adding that it did not remove tax payments for existing industries.
“FEC approved a memorandum that was presented to amend the list of pioneer industries and products that will enjoy pioneer status going forward,” he stated.
“As many of you know the pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act and the whole purpose is to give tax holidays to industries we consider pioneer.
“Pioneer doesn’t mean that they are new it only means that they are not yet mature, we want those industries to grow. We want to attract investment in them and you will find that this covers a wide range of industries and those tax holidays ranges from three to five years.
“The pioneer list was last reviewed by the Federal Executive Council in 2006, so you could see that this was long overdue.
“On doing the review, special attention was paid to the ERGP to capture the current realities that will help to implement the plan to make sure we attract the kind of investment, industries and players that will help to implement and realize our objectives in the ERGP.
“I should also point out that there was multi stakeholder engagement, private and public sector in arriving at the industries that will be included in the pioneer incentive scheme.
“In terms of the recommendations approved by FEC today, we have tried to remove all ambiguities in the definition of industries by reclassifying industries according to the international standard in industrial classification which is the global standard which is also the standard that is used by the Nigeria Bureau of Statistics.
“The other thing we also did is to agree that the pioneer list will be reviewed regularly every two years, biannually so that just that if things come up, we live in a fast changing world and we are being responsive to our world. In the case of additions to the list they will be effected immediately.
“For deletion of industries that we consider mature there will be a three year window that will be allowed for those that are already investing in that industry that were enjoying pioneer status to carry on till the end of that three year period.
“Against this backdrop, we then approved 27 industries that were recommended for addition to the pioneer list today. We also recommended and it was accepted by the Council that mineral oil prospecting which is governed by the Petroleum Profit Tax should not be part of the pioneer industries list which is really industries governed by the Companies Income Tax Act.
“It was also accepted that given the success we have achieved in cement which are now net exporters, maybe that is an industry which we could say that we are now where we want to be in terms of maturity even though there is still a lot of scope for the application and the use of cement and you know that will continue. We already have critical mass in cement.
“The scheme will ensure that it will not deprive us of revenue. It is an incentive to make people enter your market, new enter industries, invest more for people who are already here. It will increase our tax base over time.”
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