Tax Holiday: Stakeholders Kick Against Exclusion Of Cement

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Stakeholders in the nation’s manufacturing sector have condemned the exclusion of players in the cement sector from the federal government’s recent review of its pioneer status list which gave tax holidays to 27 industries.

Specifically, the Manufacturers Association of Nigeria (MAN) said it was not consulted before the review was announced.

Their concerns were voiced as the Minister of Industry, Trade and Investment, Okechukwu Enelamah, made the clarifications on businesses that would enjoy the 3 -5 year tax holiday, following the Federal Executive Council’s approval for 27 new industries to grow and expand their investments.

The list was last reviewed in 2006 but the latest approval was to bring the industrial policy of the country to global best practices.

The Minister while making the clarification explained that the pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.

But several other stakeholders said that the government policy has angered MAN which expressed disgust that cement manufacturers were excluded from the policy as it was taken that the country had already become a net exporter of the product.

In a chat with Journalists Sunday in Lagos, MAN said it had written a protest letter to the Acting President, Yemi Osibanjo, on behalf of its members in the cement sector.

According to the MAN President, Frank Jacobs, the association is unhappy that government by mere assumption that cement is now being exported removed the product from the pioneer status list.

He said, “The review removed certain industries from the list and players in the cement industry are not happy. It is unfortunate for government to believe that what we have achieved in the sector is enough.

In his speech, “We are not there yet; the sector is not fully matured. A lot of projects are going on and if the sector is removed, the investors may not be able to complete them and may think Nigeria is not serious.”

Though the minister said there was multi-stakeholder engagement involving the public and private sectors in identifying the industries suitable for the pioneer incentive scheme, the MAN president said the association knew nothing about the policy and only read and heard it in the media.

“We are not happy that practitioners were not carried along in this policy regime unlike in the past; at least we would have been able to offer appropriate advice. In fact we have written a letter of protest to the Acting President, which I have signed today”, he stated.

He however said MAN was not against the policy, but the exclusion of some of its members industries, adding that pioneer status is an incentive that would attract more people to invest in the Nigeria’s economy.

In his view, the Regional President of the Industrial Global and General Secretary of the National Union of Textile Garment and Tailoring Workers (NUTGTW), Isa Aremu, also faulted the exclusion of textile manufacturers from the pioneer list, which rather gave consideration to the manufacturers of machines for textile companies.

He had said, “While we commend the approved government tax Relief for some 27 pioneer Industries in Nigeria, we think it should have included existing textile companies.

“All the value chains not Textile machine manufacturers and some film producers deserve government support. The National Industrial Promotion Council (NIPC) must revisit this policy to make it more inclusive.”

Also reacting, Partner, Bloomfield Law Practice, Mr. Ayodele Oni, said the Industrial Development (Income Tax Relief) Act Cap I17 LFN 2004 (“IDA”) defines Pioneer Status as a trade and commerce incentive provided to companies that provide goods and services in specific delineated sectors of the Nigerian economy, giving them a 3 year tax holiday which may be extended for up to 2 years.

The Oni maintained that he does not expect that there would be any changes regarding the power and mining sectors as these already enjoyed pioneer status before now.




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