FG Denies Pioneer Status to Flutterwave, Nine Others

Nigeria's Federal Government has rejected the application of tech company Flutterwave and nine others seeking pioneer status under the Industrial Development Income Tax Act in Q1 2021.

Flutterwave popularity surged last year both as a result of pandemic-induced adoption and when it became one of the platforms for raising funds for #EndSARS protesters.

The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. It is granted only for manufacturers of products that do not already exist in the country.

An analysis of the first quarter Pioneer Status Incentive report obtained from the Nigeria Investment Promotion Commission showed that while the requests of 10 firms were denied, three companies had their applications approved-in-principle, while six firms were granted PSI for a three-year period.

The report also revealed that 33 firms are currently benefitting from the tax incentive scheme while the requests of 132 companies were still pending.

The six companies that were granted a tax holiday between January and March are Pan African Towers Ltd, African Foundries Ltd, Aarti Rolling Mills Limited, Princess Medi-Clinics Nigeria Ltd, Medlog Logistics Ltd, and Tiamin Rice Ltd.

Aside from Flutterwave Technology Solutions Limited, those whose applications were also rejected were Fountain Manufacturing Company Limited, Echostone Development Nigeria Limited, Al-Hamsad Rice Mill Limited, Benchmark Constructions Limited, Super Packaging Limited, Royal Foam Products Nigeria Limited, ENGIE Fenix Nigeria Limited, Flour Mills of Nigeria Plc and Envoy Hotel Limited.

Those rejected are into soap manufacturing, real estate development, rice milling, manufacturing of woven sacks, mattresses, solar power generation, grain products, and online payment services.

The NIPC report revealed that the companies were denied tax exemptions for various reasons, ranging from ineligibility of business activities for which incentives were sought to late submission of applications.