The total number of local and foreign companies exempted from remitting tax revenue to government coffers increased to 105 as of December 2024, The PUNCH reports. Dangote Fertilisers, Mikano International Limited, and 103 others are included in this list.

This came amid uncertainties over the programme’s effectiveness and the government’s announced plan to discontinue the policy as part of a broader strategy to boost its dwindling revenue base.

The Federal Government, through the Nigerian Investment Promotion Commission, approved tax holidays for 22 new companies under the Pioneer Status Incentive scheme, raising the total number of beneficiaries to 105 in the final quarter of the year.

This comes after the number of participating firms rose to 104 in the first quarter, declined to 88 in the second quarter, and dropped to 83 in the third quarter. 

This was disclosed in the latest Pioneer Status Incentive reports released by the Nigerian Investment Promotion Commission and obtained by our correspondent on Wednesday.

Findings by The PUNCH also revealed that since the Chairman of the Presidential Tax Reform Committee, Taiwo Oyedele, announced in September 2023 that the committee would conduct a comprehensive review of tax waivers, aligned with the roadmap set by the previous administration, a total of 25 companies have received regulatory approval for tax exemption for the next three years.

The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.

Offered under the Industrial Development Income Tax Act with tax reliefs for a three-year period, the incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy. The products or companies eligible for this pioneer status are those that do not already exist in the country.

However, the incentives have been a contentious issue due to the high amount of revenue lost to waivers granted every year. The special tax exclusion has reportedly cost the government an estimated N8tn in lost revenue annually.

Last week, the Executive Chairman of the Federal Inland Revenue Service, Zacch Adedeji, at the 2025 Tax Expenditure Workshop revealed that revenue lost to tax expenditure remains difficult to quantify due to poor data availability across relevant government agencies.

He said this is because tax incentives are not properly weighed against their real economic benefits, which makes it hard to know their true cost and creates room for unverified tax expenditure figures in different quarters.

Adedeji said, “It has been argued that the government is losing revenue through tax incentives, which have been difficult to quantify due to limited data availability. In granting tax incentives by the government, there are expected benefits to be derived from the entities that enjoy these incentives, such that if adequately quantified when analysing the Tax Expenditures in terms of socio-economic impact will show that the actual financial cost to government vis – a viz benefits will be minimised, and a positive developmental curve or growth curve will be observed.”

To address the ongoing challenges, the government has proposed four new tax bills aimed at stimulating economic growth and attracting investment, including a new tax credit scheme (the Economic Development Incentive) intended to replace the existing Pioneer Status Incentive. However, the legislative process has stalled at the National Assembly, delaying implementation.

The Presidential Tax Committee Chairman, Taiwo Oyedele, said the development incentive is designed to stimulate real economic activity by tying tax relief directly to verifiable investments.

The proposed tax credit or EDI is a departure from the one-size-fits-all model. Instead, it’s structured around priority sectors -primarily manufacturing, followed by services and infrastructure – with strong multiplier effects on the economy.

Another key design feature is the introduction of minimum investment thresholds to ensure only scalable and impactful projects qualify. For instance, companies operating in capital-intensive sectors like utilities would need to invest at least N200bn to be eligible for the tax credit.

“The assets used during the pioneer period are essentially frozen in time,” Oyedele explained. “They’re treated as if acquired after the incentive ends—meaning companies only start claiming deductions once the holiday period is over. This creates long-term tax advantages that go well beyond the policy’s original intent.”

Meanwhile, an analysis of the quarterly PSI report showed that the requests of 89 firms to be granted tax holiday were newly received, 213 firms are pending; 34 companies had their applications approved in principle, while 14 firms were granted incentive extensions for another three years to 2027. Another 30 are seeking a renewal application for extension.

The companies with new applications include Aradel Refineries Limited, Pro Pipes and Metal Industries Limited, Transgreen Nigeria Limited, Zen Cylinders Manufacturing Company Limited, Nixn Paper Mill Nigeria Limited, Burn Stoves Nigeria Limited, MDV Sacks Limited, Everest Pulp and Paper Limited, Jolaj Office Products Nigeria Limited, Heven Hauling Limited, KP Hydro Limited, and Levene Photo Voltaic Technologies Limited.

Others are Seelam and Joel Company Limited, Medical Plastics Limited, Padiyath Mayfield Hospital Limited, Afam Three Fast Power Limited, El Tahdam Exploration Limited, Adefolorhunso Energy Network Limited, and Terrahaptix Limited. The applications were received between October 2 and December 17, 2024.

The reports also revealed that investments made by the 107 companies during the year amounted to N2.53tn. They operate in sectors that include manufacturing, solid material, pharmaceuticals, information and communication, trade, construction, waste management, electricity and gas supply, tourism, and infrastructure, among others.

The companies that are benefiting include Dangote Fertilisers, Mikano International Limited, Sinotrucks West Africa Limited, West African Cubes Limited, Jigawa Rice Limited, JMG Nigeria Limited, Rain Oil Limited, Okpella Cement Plc, Greenville Liquified Natural Gas Company Limited, Etsako Cement Company Limited, Gidan Bailu Cement Company Limited, Auxano Solar Nigeria Limited, AP LPG Limited, Karma Agric Feeds and Foods Limited, and Agrira West Africa Limited.

Additional beneficiaries of the Pioneer Status Incentive include H & W Rice Company Limited, Segilola Resources Operating Limited, Sifax Marine Limited, Ocean & Cargo Terminal Services Limited, Hulhulde Rice Mill Limited, and O2O Network Limited, Villextra Technologies Limited, Flex Films Africa PVT Limited, Addmie Nutrition Limited, Century Minning Company Limited, Eastcastle Infrastructure Nigeria Limited, Ecovista Industries PVT Limited, The Safron Hotel Limited, Green Recycling Industries Limited, and Fouani Nigeria Limited.

Additional companies that have received Pioneer Status Incentive approvals include Al-Wabel Rice Mill Limited, Royal Salt Industries Limited, Mustang Industries Limited, Kam Steel Integrated Company Limited, Alef Recycling Company Limited, IRS Pasta Limited, JMG Limited, Tiloc Nigeria Limited, Johnwood Hotel Limited, Mafa Rice Mills Limited, and Shafa Energy Limited.

Economic experts have repeatedly raised concerns about the transparency and objectivity of the Federal Government’s tax waiver approvals, even as they acknowledge the crucial role such incentives play in stimulating economic growth.

The Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, also noted that there was nothing wrong with waivers if they were in line with tax policies.

He noted that tax incentives were necessary to encourage investment and the establishment of some pioneer businesses.

He said, “The whole idea of incentives is to grow the economy. When you are growing the economy, you are not only looking at revenue, you are looking at employment and multiplier effects. In the medium to long term, you will get this revenue by the time you are able to grow these investments. It is inappropriate to see it as revenue loss unless the incentive policy itself is discriminatory.”

He stressed that the process should be transparent and seen as an effort by the government to grow the economy.