The Nigerian federal government has approved tax relief for tech startups to encourage and support the development and growth of more innovation-driven businesses.
Communications and Digital Economy Minister Isa Ali Pantami revealed this on Sunday, saying the tax breaks and incentives would help create millions of jobs in the country.
Pantami said the initiative was among a number of strategies offered at an interactive forum held Feb. 22, 2022, when he led a federal government delegation on a working visit to the ecosystem. of Lagos Digital Innovation, including the Managing Director of NITDA. , the Executive Deputy Chairman of the Nigerian Communications Commission (NCC), the Postmaster General and the Managing Director of Galaxy Backbone Plc.
“It will also help develop innovative solutions to societal problems and grow rapidly, as well as diversify the Nigerian economy, in line with the National Digital Economy Policy and Strategy for a Digital Nigeria.“, we read in the press release.
“Nigeria’s startup ecosystem has attracted around 35% (estimated at $1.4 billion) of the over $4 billion raised by African startups, which is the highest of any startup ecosystem on the continent ..
“The Nigeria Startup Bill was previously approved by the Federal Executive Council and forwarded to the National Assembly and the process is approximately 90% complete..
“The approval of the Board Incentives will consolidate long-standing gains in the NSB process. The implementation of the National Digital Economy Policy and Strategy underscores the importance of the innovation ecosystem and startups for the development of an indigenous digital economy.”
Pantami added that the Federal Government will continue to position Nigeria to develop the technology ecosystem to transform Nigeria into a country with a sustainable and thriving digital economy.
The Federal Executive Council (FEC) had last week approved a plan to further foster and harness the ecosystem of digital innovation and entrepreneurship in Nigeria. This followed the presentation of a memo by Pantami.
According to the Ministry of Communications and Digital Economy, the endorsement will help develop innovative solutions to societal problems, grow rapidly and diversify the Nigerian economy in line with the National Economy Policy and Strategy. (NDEPS) for a digital Nigeria.
The implementation of the NDEPS highlights the importance of the innovation ecosystem and startups for the development of an indigenous digital economy.
The Nigeria Startup Bill (NSB) was previously approved by the FEC and forwarded to the National Assembly and the process is approximately 90% complete.
The approval of the FEC incentives will consolidate long-standing gains in the NSB process.
The FEC has approved the following recommendations, pursuant to Executive Order 003 and Executive Order 005:
I. that the Federal Ministry of Finance, Budget and National Planning and the Nigerian Investment Promotion Commission (NIPC) should prioritize the provision of tax relief and other incentives such as the pioneer status (PSI) to the technology and innovation ecosystem;
ii. That the Nigerian Copyright Commission, Trademark Registry and Patent and Design Registry should work with the National Information Technology Development Agency (NITDA) to develop an Intellectual Property (IP) Framework for the technology and innovation ecosystem within two (2) months and;
iii. That the Bureau of Public Procurement (BPP) work with NITDA to develop a framework that will ensure the involvement of technology innovation startups in public procurement processes to encourage ideation, innovation and design solutions to resolve development issues within two (2) months.
What is the tax reduction for?
Startups have the potential to play a major role in the growth of developing countries, particularly because of their ability to reduce unemployment, create wealth by attracting local and foreign investment and provide practical solutions to local problems. .
Tax relief will reduce operational costs, including product development and upgrades and possible increase in wages and salaries
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