The Federal government of Nigeria through the Nigerian Investment Promotion Commission (NIPC) has said the three-year break from company income tax under the pioneer status initiative (PSI) given to renewable energy firm Rensource Distributed Energy Limited will expire December 2020.
Pioneer Status Incentive (PSI) is a tax holiday provided under the Industrial Development (Income Tax Relief) Act, which grants qualifying industries, products relief, from the payment of corporate income tax for an initial period of three years, renewable for one or two additional years.
According to latest NIPC third quarter 2020 report, Rensources Energy with an investment value of N158 million got a three-year tax holiday for its operation in a pioneer industry which deals with electric power generation, transmission and distribution.
The report noted Rensources Energy’s PSI was approved on December 31, 2018, and expires on December 31 2020.
The current PSI beneficiaries which consist of 36 other companies also include Abuja based Txtlight Power Solutions Limited who was given a three year tax holiday for its product in the operation of solar electricity generation facility.
Read Also: How Solar Nigeria Programme is providing clean energy for poor communities
The company with an investment value of N589.44 million got its PSI approved on 25 July 2018 and expires on 30 June 2021.
The report states that NIPC received new pioneer status applications from 28 companies, although there are 102 pending applications for the PSI, with 60 companies abandoning their PSI applications.
NIPC stated that no approvals were denied during the period.
The aim of the incentive is to encourage investment in certain industries not fully explored or where the existing industry is not operating at a level that is sufficient to meet the nation’s needs. A company that meets the qualifying criteria is issued a pioneer certificate by the NIPC.
Renewable energy has an important role to play in meeting future energy needs in both rural and urban areas. With the right tax incentive, Stakeholders hope that investment in renewable energy will increase and Nigerians can be productive in the ‘new normal’ (After Covid-19) way of business operations.
