Nigeria dangles incentives to lure more investors

The Federal Government weekend unveiled a compendium of investment incentives to attract more investment inflows into the economy.
The compendium of investment incentives, which is based on 2016 Fiscal Policy, is brought under six sectors and are broadly divided into four sections that include: Investment Polices and Protections; Tax-based incentives; Tariff-based incentives, and Special Economic Zones.
It is also aimed at raising awareness of investment incentives in Nigeria, the relevant administering agencies, and to serve as a useful guide in making informed investment decisions for investors seeking to invest in Nigeria, as part of ease of doing business drive of the present administrations.
“In compiling the compendium, great care was taken to ensure completeness and accuracy. Efforts were made to ensure that all incentives presented in the compendium are backed by law or have been gazetted,” Yewande Sadiku, executive secretary of NIPC, and Tunde Fowler, executive chairman of FIRS, said in a joint press conference.
Under the Investment Policies and Protections section, as regards bilateral investment treaties on double taxation agreements, the compendium states that, “The agreements make provisions for the elimination of double taxation with respect to taxes on income and capital gains.”
Furthermore, as regards Investment Promotion and Protection Agreement (IIPA), it seeks reciprocal promotion and protection of investments by individuals and companies in the territories of participating states.
On general tax-based incentives, the exemption from value-added tax, according to sections 2&3 First Schedule VAT Act, lists the goods and services exempted from VAT on goods to include: All medical and pharmaceutical products; basic food items, books and educational materials; baby products, and fertilizer.
Also included include in the general tax-based incentives are: locally produced agricultural and veterinary medicine, farming machinery and farming transportation equipment; all exports, plant and machinery imported for use in export processing zones; among others.
On sector specific incentives, Section 36 of Companies Income Tax Act (CITA) provides that a new company going into the mining of solid minerals shall be exempt from tax for the first three years of its operations. Also included in sector specific incentives are interest drawback programme fund for cassava processing which provides 60 percent repayment of interest paid by those who borrow from banks under agricultural credit scheme for the purpose of cassava production and processing.
On tariff-based incentives, there is zero percent import duty on agriculture equipment and machinery, HS Headings 84, 85 and 90. Zero percent import duty rate greenhouse equipment has been classified as agricultural equipment HS Heading 94.06.
Incentives in the export processing zone include: All industrial undertakings, including foreign companies and individuals operating in an export processing zones. They are allowed full tax holiday from federal, states and local governments.
Yewande Sadiku, speaking on the benefits of the incentives, said: “With the compendium of investments incentives in Nigeria, the investors have a useful document in one location. For the Nigerian Investment Promotion Council (NIPC), this is a great step towards incentives reforms in Nigeria. The first step was to put together all incentives that are backed by legal instruments and showcase them to our investors.”
She also pointed out that the government would in no distance time have a review of the impact of the incentives that exist, adding that it would help to ascertain their overall impact so far on the Nigerian economy.
“It was as a part of strategy to attract the right kind of investments into the economy that we are offering these incentives, but it is also closely monitored. We just reeled out of recession and had growth rate of 0.55 percent and we must woo these investors into our economy with the right kind of incentives.”
On his part, Fowler noted, “The compendium covers all the areas that any business man or woman that is doing business wants to inquire about, which is in line with the federal government’s ease of doing business drive. This is another step towards attracting the right kind of investment into the country in a coordinated approach.
“In order to address and forestall issues of abuse, I am aware that the Minister of Finance has a team that supervises and monitors closely, of which the NIPC and FIRS is part of,” he said.

HARRISON EDEH, Abuja