The revised Pioneer Status Incentive (PSI) list may no longer be news, but what remains important is taking advantage of this provision to get started, and possibly expand businesses in one of the 27 industries covered.
As previously highlighted, the PSI is a tax holiday given to companies to enable them hit the ground running (or expand) so that they can thrive and be profitable. The tax holiday is given for an initial three year period and renewable for another two years as a way of stimulating growth and development of Nigeria’s economy. This privilege may also be a seven-year tax holiday in respect of industries located in economically disadvantaged local government areas of the country.
HOW TO APPLY
Application guidelines by the Federal Ministry of Industry, Trade and Investment indicate in section three (Considerations & Mode of Application), that an applicant must make a new application in the first year of production/service and must apply for an extension no later than one month after the expiration of the initial tax relief period of three years or an extension of one year. Furthermore, it is expected that an applicant must be engaged in an activity listed as a pioneer industry or pioneer product (the full recent list is shown in the table).
Applying for the PSI is not free. A service fee schedule by the Nigerian Investment Promotion Commission (NIPC) shows that an application fee, amongst others (listed below) will be incurred. The application fee is payable via REMITA prior to submission of Part I of pioneer status incentive application form. The application fee is non-refundable.
Requirements for a New Application
1. Application fee: N200,000
2. Due diligence fee: N500,000
3. Service charge deposit: N2,500,000
4. Annual service charge: 1% of actual pioneer profits
Application for Extension
1. Application fee: N100,000
2. Annual service charge: 1% of actual pioneer profits
CALEB OJEWALE
