FG grants tax exemptions to Dangote, Mikano, another 103 among the requests for reform

The Federal Government has granted tax exemptions for the fertilizers of Dangote, Mikano International Limited and 103 other companies, increasing the total number of beneficiaries as part of the pioneering status incentives (PSI) at 105 in December 2024,

This development comes between the growing concerns about the economic effectiveness of politics and the government plan to gradually eliminate the current tax incentive regime in favor of a more targeted approach.

According to the latest PSI report published by the Nigerian Investment Promotion Commission (Nipc), 22 new companies were granted pioneer status in the last quarter of 2024.

This marks a remarkable increase from 83 beneficiaries recorded in the third quarter. However, a floating trend follows during the year – from 104 in the first quarter to 88 in the second and 83 in the third.

The state of Pioneer exends companies eligible for income tax for a maximum of three years and is aimed at encouraging investments in sectors considered underdeveloped or non -existent in Nigeria. It is offered in accordance with the income tax on industrial development tax.

The important companies among the latest recipients include Sinotrucks West Africa Limited, Rain Oil Limited, JMG Nigeria Limited, Okpella Cement Plc and Greenville Liquefied Gas Company Limited.

Others include Karma Agric Feeds and Foods Limited, Sifax Marine Limited, Flex Films Africa Pvt Limited and Royal Salt Industries Limited.

The report showed that these 107 companies have invested a total of N2.53TN in various sectors, including manufacturing, pharmaceutical products, tics, construction and renewable energy.

Despite the scope of investments, the regime continues to trigger the debate on its long -term transparency and impact. Tax experts and interested parties questioned the real economic benefits of politics in the face of an estimated N8TN lost every year due to tax exemptions.

Speaking at the 2025 tax expenditure workshop, the executive president of the Federal Inland Revenue Service, Zacch Adedeji, admitted that the government struggles to quantify the exact cost of these exemptions due to weak data systems between pertinent agencies.

“It has been argued that the government is losing entrances through tax incentives, which have been difficult to quantify due to the limited availability of data,” said Adadeji.

“In granting tax incentives, the services provided must be evaluated with respect to socio-economic results”.

The federal government, in response to these concerns, has proposed four new tax invoices, including a transition from the PSI regime to a new model known as the incentive for economic development (Edi).

The Edi aims to connect the tax relief directly to verifiable investments, focusing on priority sectors such as production, infrastructure and services.

The president of the presidential tax reform committee, Taiwo Oyedele, explained that the Edi would have imported minimum investment thresholds and would bind benefits to the actual economic results. For example, companies in highly capital high intensity sectors should invest at least N2ria billion to qualify.

“The activities used during the pioneer are essentially frozen over time,” said Oyedele. “They are treated as if they had acquired after the end of the incentive: companies that demand begin to request deductions only once the holiday period is finished.”

However, legislative delays have blocked the implementation of the new framework of incentives, leaving the current PSI structure for now.

Economic analysts continue to underline the importance of transparency and alignment with national development objectives.

The CEO of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf, observed that while the tax exemptions are essential to attract investments, the process must be right and transparent.

“Incentives don’t concern immediate revenue,” said Yusuf. “They are stimulating the economy. If they manage properly, they create jobs, increase production and increase future tax revenues.”

Starting from the fourth quarter 2024, applications for 213 psi were still underway, while 14 companies received extensions for their tax holidays. Other 30 companies have submitted requests for renewals and 89 new applications were received during the quarter.

Do you want to share a story with us? Do you want to advertise with us? Do you need advertising for a product, service or event? Contact us on WhatsApp +2348183319097 email: platformtimes@gmail.com

We commit ourselves to an investigative journalism of great impact for human interest and social justice. Your donation will help us tell other stories. Please give any amount HERE