Post Views: 142 The Federal Government, on Monday lifted the administrative suspension on processing Pioneer Status Incentives (PSI) applications, jus...
The Federal Government, on Monday lifted the administrative suspension on processing Pioneer Status Incentives (PSI) applications, just as it published new guidelines for applications as well as a revamped list of pioneer industries and products.
On the list of new 27 broad industries now to enjoy pioneer status as released by the Ministry of Industry, Trade and Investment are: Mortgage-back securities and Real Estate Investment Trust Schemes (REITS) under the Investments and Securities Act; Business process outsourcing, electronic commerce services, music production, publishing and distribution as well as motion picture, video and television programme production distribution, exhibition and photography.
Others are businesses involving software development and publishing; waste treatment, disposal and material recovery; manufacturers of plastics and rubber machinery; manufacturers of machinery for paper and paperboard production; manufacturers of machinery for textile, apparel and leather production. There are also manufacturers of machinery for food and beverage processing; manufacturers of machinery for metallurgy; metal-forming machinery and machine tools; railway locomotives, weapons and rolling stock; steam generators; batteries and accumulators, plastic products (builders’ plastic ware) and moulds; paints, vanishes and printing ink; household and personal hygiene paper products, leather footware, luggage and handbags.
On the list which was arrived at following the conclusion of critical reforms to the incentive regime are: operators engaged in tanning and dressing of leather; processing of cocoa; processing and preservation of meat/poultry and production of meat/poultry products; and mining and processing of coal.
According to the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, the list was approved by the Federal Executive Council (FEC) at its meeting last week, as well as a biennial review of the list going forward.
“In line with the reform provisions, all additions will be added to the list immediately, and all deletions will be removed from the list in three years, according to Constance Ikokwu, media aid to the minister.
Enelamah explained that the review of the list of Pioneer industries and products was done to bring it in line with the economic realities of Nigeria and the Economic Recovery and Growth Plan (ERGP), adding that “The Federal Government is committed to encouraging and attracting investments into critical sectors of the economy which will significantly impact development and deliver key benefits to the country.
“These benefits include Economic Growth and Diversification; Industrial and Sectoral Development; Employment; Skills and Technology Transfer; Export Development; and Import Substitution.”
Commenting on the report, Executive Secretary of the Nigerian Investment Promotion Council (NIPC) Ms. Yewande Sadiku, said “the reforms have brought further clarity, predictability and process efficiency to the PSI regime. We will continue the reform process as we plan to take the PSI application process online. We will also engage with relevant stakeholders with a view to updating the existing legislations.”
The statement recalled that an administrative suspension was placed on the processing of PSI applications in September 2015, to allow for a comprehensive review and reform of the incentive regime.
This was aimed at increasing transparency and process efficiency, better articulating the expected economic benefits, and improving the Federal Government’s ability to measure the impact of the incentive.
The new application guidelines provide information on the considerations for assessing new PSI and extension applications. It further outlines the application processes and timelines. It also details the ongoing obligations of beneficiaries.
The PSI grants companies making investments in qualifying industries and products a tax holiday from the payment of company income tax for an initial period of three years, with the possibility of an extension for one or two additional years.
An industry or product is designated as pioneer if it is not being carried on in Nigeria on a scale suitable to the economic requirements of the country or not at all; or where there are favourable prospects for further development; or if it is expedient in the public interest to encourage the development and establishment of an industry in Nigeria.