Here is the full list of the 27 industries to enjoy the pioneer status.
- Mining and processing of coal;
- Processing and preservation of meat/poultry and production of meat/poultry products;
- Manufacture of starches and starch products;
- Processing of cocoa;
- Manufacture of animal feeds;
- Tanning and dressing of Leather;
- Manufacture of leather footwear, luggage and handbags;
- Manufacture of household and personal hygiene paper products;
- Manufacture of paints, vanishes and printing ink;
- Manufacture of plastic products (builders’ plastic ware) and moulds;
- Manufacture of batteries and accumulators;
- Manufacture of steam generators;
- Manufacture of railway locomotives, wagons and rolling stock;
- Manufacture of metal-forming machinery and machine tools;
- Manufacture of machinery for metallurgy;
- Manufacture of machinery for food and beverage processing;
- Manufacture of machinery for textile, apparel and leather production;
- Manufacture of machinery for paper and paperboard production;
- Manufacture of plastics and rubber machinery;
- Waste treatment, disposal and material recovery;
- E-commerce services;
- Software development and publishing;
- Motion picture, video and television programme production, distribution, exhibition and photography;
- Music production, publishing and distribution;
- Real estate investment vehicles under the Investments and Securities Act;
- Mortgage backed securities under the Investments and Securities Act; and
- Business process outsourcing.
What is Pioneer Status?
Pioneer Status is an incentive scheme meant to woo investors and in return raise the country’s tax base. Industries and products that enter into the pioneer status are given tax holidays for three years, to enable them to grow and expand investments. The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.
The Pioneer Status Industry 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.
Also, 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.
Pioneer Status is an incentive put in place by the Nigerian government to encourage investments and business expansion. It shows that in Nigeria, the government understands that an unfavourable tax environment can inhibit the growth of any economy,
Again, the pioneer status incentive is a tax holiday given to companies for a period of time, to encourage the growth and development of the Nigerian economy. A new company or an existing company with an expansion plan may apply for a certificate of pioneer status which lasts for 3 years and is renewable upon application for 2 years. It may also be a seven-year tax holiday in respect of industries located in economically disadvantaged local government areas of the country.
The Government may also direct that an industry be categorised as pioneer and therefore qualify for up to 5 years tax holiday if:
- the industry is not being carried on in Nigeria on a scale suitable to the economic requirements of Nigeria; or there are favourable prospects of further development in Nigeria of that industry; or
- it is expedient in the public interest to encourage the development or establishment of such an industry and the products of the industry to be a pioneer product.
A pioneer status may also be granted if the new investment provides for some level of support and alignment to the efforts of the government in terms of poverty alleviation, by direct and indirect employment of more Nigerians.
The new application guidelines provide information on the considerations for assessing new Pioneer Status Industry and extension applications. It further outlines the application processes and timelines. It also details the ongoing obligations of beneficiaries. An applicant for the pioneer status must be a body corporate, registered in Nigeria; and must have incurred capital expenditure of not less than N10 million.