Okra, uLesson granted tax exemptions for $120.95 million investment in 2023

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  • The Nigerian government”s tax exemption scheme has benefited nine companies in the information and communication industries.
  • Okra, MDX-i, uLesson, and Villextra are among the nine companies listed. While some of the companies got approval, others got an extension.
  • These companies invested up to ₦159.61 billion ($120.95 million) in 2023 and received the Pioneer Status Incentive (PSI) under the Industrial Development Income Tax Act.

The PSI is a scheme by the Nigerian federal government to encourage economic investment by exempting new companies from paying income tax, either entirely or partially, for a set time.

The list, previously open to eligible pioneer trades from approximately 37 industries, now includes over 90 product/industry categories, including ICT.

In Q4 2023, thirteen companies received PSI approval, five received an extension, and twenty got approval-in-principle (effective upon application fee payment). Currently, PSI benefits 107 companies. However, 211 companies have yet to receive PSI approval, and Flutterwave’s application was turned down in 2021.

In the fourth quarter of 2023, Okra Technologies Limited, a finance API firm with an investment of ₦109.54 million, received PSI approval until 2025. 

Amplitude Telecoms Africa Limited and the software company Villextra Technologies Limited will have the PSI until 2026. Both have investments of ₦4.8 billion and ₦930 million, respectively.

Eastcastle Infrastructure Nigeria Limited, a telco, and O’odua Infraco Resources Limited, a network infrastructure provider, have received PSI status approvals-in-principle for three years with investments of ₦34.86 billion and ₦96.15 billion, respectively. 

MDK-i, a data centre services provider with a total investment of ₦1.35 billion, received a two-year contract extension.

The PSI scheme already includes about three technology companies. Global Independent Connect Limited has invested ₦8.28 billion until 2024, while uLesson Education Limited has invested ₦470.31 million with approval ending this year.

Egole Pay Limited, a payment service provider with a ₦650 million investment, is also on the list. However, their approval will expire in 2025.

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Furthermore, the PSI scheme has been criticised for favouring a few companies, prompting a review. In addition, the IMF has advised Nigeria to eliminate tax breaks and to strike a balance between investor attraction and tax revenue generation.