Mr. Taiwo Oyedele, a tax expert, says only tax incentives to industries without addressing other challenges will not bring about the desired economic growth in Nigeria.
Oyedele, Head, Tax and Regulatory Services at PricewaterhouseCoopers (PwC), made the assertion in an interview with the News Agency of Nigeria in Lagos, yesterday.
He said that the task in Nigeria should be how to attract investors based on the enabling environment and viability of the country’s business climate rather than luring them with Pioneer Status Incentive (PSI). The Federal Executive Council (FEC), had at its last meeting, approved additional 27 industries to enjoy the Pioneer Status Incentive to encourage and attract investments into critical sectors of the economy,
Oyedele described pioneer status incentive as a tax holiday granted to industries not necessarily engaging in pioneering activities, but considered not mature and requiring support to grow. The PSI exempts companies which meet certain requirements from the payment of company income tax for an initial period of three years and subject to additional one to two years renewal.
Oyedele said that the problem of the manufacturing sector was not that of tax holiday, but many other disincentives hindering their growth and competitiveness.
“There is the challenge of power, quality of products, trade tariffs, dumping of substandard foreign goods, lack of infrastructure and the perceived harsh business operating environment. “Many of the companies that left Nigeria, such as Dunlop, left because they cannot make profit. If you cannot break even and I give you pioneer status, you are only wasting your time.