According to a report published last week, Flutterwave and nine other companies would not benefit from a tax incentive scheme offered by the Nigerian government.
The Nigerian federal government has the power to offer corporations pioneer status incentives (PSI) that exempt them from paying income tax for a set period of time. This is done in order to attract and encourage the establishment of new enterprises throughout the country.
The Industrial Development Income Tax Act No. 22 of 1971 introduced the Pioneer Status Incentive. It’s a five-year tax holiday that exempts certain businesses and goods from paying corporate income tax (three years initially and renewable for an additional one or two years).
Some of the Industries that qualify are Information and Communication; Trade; Construction; Agriculture; Mining and Quarry; Electricity and Gas supply; Waste Management; Manufacturing; Administive service and Financial services where Flutterwave is listed.
Aside from falling into one of these categories, candidates must have actual long-term assets worth more than $100 million ($243,837) and be able to show how beneficial their firm is to the Nigerian economy.
These companies were denied for a variety of reasons, according to a report by the Nigerian Investment Promotion Commission (NIPC).
Five firms were turned down because their projects were incompatible with the PSI system across the board. Flutterwave and three other applicants were turned down because they submitted their applications after the deadline had passed.
According to the study, 33 companies are actively benefiting from the tax incentive program, while 132 companies’ requests are still pending.
The government is striving to improve the country’s ease of doing business ranking, according to NIPC Executive Secretary Yewande Sadiku, and also, the commission, has formed various relationships with the private sector to harness prospective investments in the country.
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