Business Hilights
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Multiple taxation hitting factories in Ogun as FG ends tax holidays for Dangote, others

The leadership of Manufacturers Association of Nigeria (MAN), Ogun State chapter has raised an issue of urgent industry importance, decrying that time has come to end frivolous tax regimes in the state or factories will be forced to relocate forthwith.

This is as the Nigerian Investment Promotion Commission (NIPC) has rejected the application of 15 companies including Dangote group and others seeking pioneer status under the Industrial Development Income Tax Act.

In his presentation at the 34th Annual General Meeting of the body in Abeokuta, the state chairman, MAN, Mr Seleem Adegunwa expressed anger on the meaning of some unexplainable state taxes including Water abstraction/borehole charges, and some other levies imposed on its members of MAN in the state.

He disclosed that the sudden upsurge of annoying tax regimes is inimical to business growth. Speaking on the theme; ‘The Manufacturing Sector: An integral part of making Ogun State the Industrial Hub of Nigeria,’ Adegunwa disclosed that “Individual manufacturing company in the state were billed water abstraction/borehole charges ranging between N2m and N450m by the state Ministry of Environment on a yearly basis”.

While recalling that former administration in the state maintained a hard stand on the matter, he called on the present regime to discontinue the charges as part of drives for ease of doing business.

He further hinted that another humongous tax recently introduced by the state government called the unified trucks drivers’ ticket which was smuggled in as new haulage ticket and being imposed on MAN members by agents of government.

According to him, “MAN and Nigeria Employers Consultative Association (NECA) had jointly instituted a legal action against the state government during last administration.”

Business Hilights gathered that pioneer status is an incentive from the Federal Government which exempts companies from income tax. It is also known as tax holiday and generally regarded as industrial investment device. This means the companies with pioneer status do not have to pay tax for a certain period of time, allowing the companies to get established. This tax exemption can be full or partial.

The products or companies suitable for pioneer status are industries or products that do not already exist in the country.

Details gathered from the second quarter Pioneer Status Incentive report obtained from the NIPC showed that while 15 companies had their applications rejected, approval in principle was given to 10 firms. The report stated that two firms had their applications extended while 181 other applications were still pending. It put the number of firms currently benefiting from the tax incentive scheme at 32 while 104 companies had abandoned their applications with the NIPC.