uLesson and Okra granted tax exemptions for a $120.95 million investment in the last year, 2023 to be precise. The Nigerian government’s tax exemption scheme has provided benefits to nine companies operating in the information and communication industries.
uLesson And Okra Granted Tax Exemptions
Nine companies in Nigeria’s information and communication industries have received benefits from the government’s tax exemption scheme. Among them are Okra, MDX-i, uLesson, and Villextra. While some received approval, others were granted an extension.
These companies collectively invested around ₦159.61 billion ($120.95 million) in 2023 and were granted the Pioneer Status Incentive (PSI) under the Industrial Development Income Tax Act. This incentive exempts new companies from paying income tax, either fully or partially, for a specific period, aiming to encourage economic investment.
Initially available to approximately 37 industries, the PSI scheme now covers over 90 product/industry categories, including ICT.
Thirteen Companies Received PSI Approval in Q4 Of 2023
In the fourth quarter of 2023, thirteen companies received PSI approval, five received extensions, and twenty were granted approval-in-principle, pending payment of application fees. Presently, 107 companies benefit from PSI, while 211 await approval. Notably, Flutterwave’s application was rejected in 2021.
Companies Granted Tax Exemptions So Far
Okra Technologies Limited, a finance API firm with ₦109.54 million in investments, received PSI approval until 2025. Amplitude Telecoms Africa Limited and Villextra Technologies Limited, software companies with investments of ₦4.8 billion and ₦930 million, respectively, were granted PSI until 2026.
Eastcastle Infrastructure Nigeria Limited and O’odua Infraco Resources Limited, a telco and a network infrastructure provider, respectively, received PSI approval-in-principle for three years. Their investments amount to ₦34.86 billion and ₦96.15 billion, respectively.
MDK-i, a data center services provider with ₦1.35 billion in total investment, received a two-year contract extension.
The PSI Also Includes Several Technology Companies
The PSI also includes several technology companies. Global Independent Connect Limited invested ₦8.28 billion until 2024, while uLesson Education Limited invested ₦470.31 million, with approval until this year. Egole Pay Limited, a payment service provider with ₦650 million in investment, has approval until 2025.
The PSI Scheme Has Faced Criticism for Favoring a Select Few Companies
Despite its benefits, the PSI scheme has faced criticism for favoring a select few companies, prompting a review. Additionally, the IMF has advised Nigeria to reevaluate tax breaks, balancing investor attraction with tax revenue generation.
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