Home News FG approves tax holidays for 20 firms

FG approves tax holidays for 20 firms

FG approves tax holidays for 20 firms

The Federal Government on Wednesday granted further tax holidays to some budding firms in the country.
The approval was given by the Federal Executive Council, FEC at its weekly meeting presided over by Acting President Yemi Osinbajo in the council chamber of the Aso Rock Presidential Villa, Abuja.

The move, according to the Minister of Trade and Investment, Dr. Okechukwu Enelama was aimed at expanding the scope of industrialisation and attracting more revenues to the country through indigenous firms. He noted that over 20 firms had been listed in the tax scheme, which will be reviewed over a three- year period adding that the policy was to make budding firms have grace of maturity before taxation commence.

“FEC approved a memorandum that was presented to amend the list of pioneer industries and products that will enjoy pioneer status going forward. As many of you know, the pioneer incentive scheme is governed by 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 3-5years. The pioneer list was last reviewed by the Federal Executive Council in 2006, so you could see that this was long overdue. “In doing the review, special attention was paid to the Economic Recovery and Growth Plan(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 sectors 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,” he said.
Meanwhile, about N10.4billion was approved by FEC for the reconstruction of Pankshin-Balank-Yalen-Salak-Gindiri road in Plateau state while N10.2billion was also approved for reconstruction of Sharre-Patigi road in Kwara state.

The minister of Power, Works and Housing, Mr. Babatunde Fashola disclosed these, explained that “The ministry presented two memoranda to the council. The first was to with respect for approval to construct the Pankshin-Balank-Yalen-Salak-Gindiri road in Plateau state for N10.46billion.The second one is the Sharre-Patigi road in Kwara for N10.2billion, both prayers were approved by the council”. He said his intervention in a prosecution involving the power ministry has saved the Federal Government about N199billion stressing that the amount would have gone into settling liabilities in a contract scam dating back to the immediate past government.

“The other memorandum was with respect to ‎an inherited liability from the old power ministry where a judgment of N119billion had been signed against the federal government as a result of acts of officials of government who varied a presidential approval without seeking further directive from him and then awarded a contract on that basis.

“The party who was a beneficiary of that contract which they subsequently sought to withdraw went to court and got a judgment. These were some of the problems that were inherited from the last administration. But we successfully reached a compromise on that matter where the judgment has been compromised for the entire sum of N119billion to N19.369.520million. So, government is no longer liable under this new agreement to pay that sum. That took about almost the entire period of my tenure here as minister to achieve this.

But what it then does also is to free up N39.17billion held under another judgment in court ‎to be used now for the supply of electricity meters to the Discos. All of these disputes arose from a contract to supply 3 million meters entered into with a contractor and NEPA which became PHCN in 2003, that’s about 14 years ago. The contract was never fully performed by both parties, neither by the contractor or government. So, from the very early days it ended up in court and government constituted one committee after another to resolve the matter. So, there was a court judgment and money was left in the bank, the purpose couldn’t be achieved, then a new contract was created which became the liability of N119billion.

“The happy news is that Council approved the memo to give effect to the negotiations that we were able to put together to compromise that judgment entirely ‎and to convert the old N37billion now to a loan to that contractor so that they can use it to supply meters through the Discos”.

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