Nigeria: A Comparative Analysis Between Pioneer Industry And Downstream Gas Utilization

INTRODUCTION

From regularly updated records, Nigeria is endowed with abundant gas wealth which remains largely untapped. According to the Department of Petroleum Resources (DPR), Nigeria's proven natural gas reserve as at June, 2020 is 203.16 Trillion Cubic Feet.¹ The above figure, as stated by DPR, marks a marginal increase of 1.16 Trillion Cubic Feet in proven natural gas reserves representing 0.57 percentage growth from the previous 202 Trillion Cubic Feet recorded in January 1, 2019.² This abundant gas reserve has earned Nigeria the appellation of "a gas province with some oil in it."³

Ironically however, petroleum operations in Nigeria concentrate on oil extraction, while gas is virtually treated as a distraction. The larger volume of the gas encountered by the upstream oil companies, is flared by a process of burning into the atmosphere. Several measures initiated to curb gas flaring, in the mode of regulation and penalization have proved mostly weak and hardly deterring to the upstream petroleum companies. Hence, incentivization is vigorously pursued to drive gas utilization with the aim of developing a strong distinct industry for gas and ameliorating the economic losses and environmental hazards from gas flaring.

The law provides exclusive incentives for gas utilization for the upstream and downstream sectors.⁴ These share several features with pioneer status incentives. With the notable common attributes of these two incentive streams, most of which bear striking resemblance, the following questions would confront a company in downstream gas utilization: does pioneer status avail such a company, considering the prerequisites for pioneer status? If a downstream gas utilization company can be granted pioneer status, can it enjoy the pioneer incentives together with the incentives made exclusive to downstream gas utilization under the Companies Income Tax Act (CITA)? What are the differences between the two classes of incentives, and which seems to hold greater advantages than the other? The Finance Act, 2019 suggests that for gas utilization in downstream operations, pioneer status operates in the alternative with the exclusive incentives for gas in the CITA, such that a company which has chosen one must forego the other. While this has substantially clarified the suppositions about the two incentive classes for gas utilization, legislative lapses still abound imbalances between the two, while this has substantially clarified the suppositions about the two incentive classes for gas utilization, legislative lapses still abound which create imbalances between the two as alternatives.

This article examines the law on the two streams of incentives for gas utilization in respect of the scope, features and merits of each, highlighting their similarities and differences for the purpose of guiding the choice of a gas utilization company between the alternatives. The comparative analysis further identifies and recommends suitable remedies for the statutory loopholes in the distinct legal regimes governing the incentives.

LEGISLATIVE DEVELOPMENTS ON GAS UTILIZATION

The Petroleum Act defines natural gas as gas obtained from boreholes and wells and consisting primarily of hydrocarbons, while Petroleum is defined to include natural gas.⁵ These definitions only contemplate the stage of upstream activities comprising exploration and production when gas is still in its natural state. Gas Utilization (Downstream Operations) is defined under Section 39(3) of CITA as the marketing and distribution of natural gas for commercial purposes, including the establishment of power plants, liquefied natural gas plants, gas to liquid plants, fertilizer plants, and gas transmissions and distribution pipelines.

The Petroleum Profit Tax Act provides a list of incentives for utilization of associated gas.⁶ This provision is aimed at utilization of gas encountered in the course of crude oil production with the ultimate motive of deterring gas flaring, although the incentives are extended to non-associated gas.⁷ The Companies Income Tax Act (CITA), on the other hand, provides incentives for downstream gas utilization.

Legislative developments on gas utilization in Nigeria bear strong nexus with the campaign against gas flaring. This is evinced in the Associated Gas Re-injection (Amendment) Act of September 28, 1979⁸ which mandated all oil producing companies in the country to submit detailed plans for gas utilization. Section 3(2) of the act, states as follows:

By virtue of the above provision, gas flaring is to be permitted by the Petroleum Minister only when gas utilization is not appropriate and gas reinjection is not feasible.

Section 1 of the act mandates every company producing oil and gas in Nigeria to submit a preliminary programme for gas utilization and gas re-injection to "the Minister" not later than 1^st April 1980; Section 2 also obligates such companies to submit to "the Minister" detailed programme and plans for either gas re-injection or gas utilization not later than 1^st October, 1980.

The above provisions laid the groundwork for incentivization of gas utilization in the upstream and downstream petroleum sectors.

GAS UTILIZATION INCENTIVES (UPSTREAM)

The Petroleum Profit Tax Act (PPTA), in its Section 11, provides a long list of incentives for gas utilization. For instance, it states that investment required to separate crude oil and gas from the reservoir into usable products shall be considered as part of the oil field development; and capital investment facilities equipment to deliver associated gas in usable form at utilization or designated custody transfer points shall be treated for tax purposes as part of the capital investment for oil development, capital allowances.⁹

Section 11(2) of the PPTA specifies conditions for the application of the incentives under Section 11(1), and these highlight the distinction between tax treatment of gas in the upstream and   the downstream, and the circumstances whereby gas income is taxed under the CITA. By Section 11(2) (c) of PPTA, the benefiting company shall keep the expenses incurred in the utilization of associated gas separate from those incurred on crude oil operation and only expenses not able to be separated shall be allowable against the crude oil income of the company under the PPTA. Section 11(2)(d) provides that expenses identified as incurred exclusively in the utilization of associated gas shall be regarded as gas expenses and be allowable against the gas income and profit to be taxed under CITA.

The effect of Section 11(2)(d) on the taxation of gas activities under CITA has been enunciated repeatedly by the courts. While revenue from natural gas is derived from upstream activities, Section 11(2)(d) of the PPTA effectively  transfers the taxation of gas income to CITA where it is taxed at 30%.¹⁰ In Nigeria Agip Oil Company Limited v. FIRS,¹¹ Agip had sought, in respect of its gas income, to claim the incentive in Section 60 of the PPTA which exempts from tax, dividends paid out of profits that were taken into account in the calculation of chargeable profits on which petroleum profits tax is assessed. The Federal High Court affirmed the earlier decision of the Tax Appeal Tribunal in ruling that by virtue of Section 11(2)(d) of the PPTA, gas income is taxed under the CITA, and so there should be no reliance on Section 60 of the PPTA to exempt dividends paid out of gas income from withholding tax. The Tax Appeal Tribunal in Total Exploration & Production Nigeria Limited v. FIRS¹² toed the above line of reasoning in applying Section 11(2)(d) of the PPTA.¹³

The obvious rational of these judicial decisions is that a company cannot have the best of two worlds by reaping from the taxation of its gas income at the lower rate under CITA while equally benefiting from Section 60 of the PPTA. In this respect, it is advised that companies should, beyond placing their gas revenue in CIT returns distinct from the PPT returns, clearly identify not just their income from gas but also the dividend arising from the gas income. A mix-up of the dividend sources may result in over-charge of the withholding tax on dividend from gas income.

GAS UTILIZATION INCENTIVES (DOWNSTREAM)

The Companies Income Tax Act, on its part, provides incentives, exclusively for companies engaged in gas utilization by way of marketing and distribution of natural gas for commercial purposes under its Section 39 of CITA.

Section 39(1) of CITA outlines the incentives for companies engaged in downstream gas utilization as follows:

1. An initial tax-free period of three years which may, subject to the satisfactory performance of the business, be renewed for an additional period of two years. An alternative is provided to this, namely, an additional investment allowance of 35 percent which shall not reduce the value of the asset. A company which claims the incentive of renewable tax-free period shall not also claim the incentive provided under paragraph (c) (ii) of this subsection;
2. accelerated capital allowances after the tax-free period, which operates in the following manner:
   1. an annual allowance of 90% with 10% retention, for investment in plant and machinery;
   2. an additional investment allowance of 15% which shall not reduce the value of the asset;
3. tax-free dividends during the tax-free period, where:
4. 1. the investment for the business was in foreign currency; or
   2. the introduction of imported plant and machinery during the period was not less than 30 percent of the equity share capital of the company;
5. interest payable on any loan obtained with the prior approval of the Minister for a gas project, shall be tax-deductible.

A lacuna occurs in Section 39(1)(a) above which extends the initial tax-free period of three years to two additional years subject to "satisfactory performance." This raises two questions, namely: which authourity determines the "satisfactory performance", and by what criteria? Section 39(2) gives a pointer to the determining authority. It states that the tax-free period of a company shall start on the day the company commences production as certified by the Ministry of Petroleum Resources. By virtue of this provision, the Minister of Petroleum Resources who has charge of that ministry, and who certifies the commencement of downstream gas utilization by the company, is best positioned to determine such satisfactory performance as would qualify a company for extension of the incentive period.

The law is however silent on the criteria to guide this crucial decision, thereby surrendering it to the Minister's discretion. Ideally, a regulation by the minister should outline the yardsticks of "satisfactory performance" in the context of Section 39(1)(a) of CITA. CITA did not make any enabling provision for such regulations, and the general provision in Section 9 of the Petroleum Act which empowers the Petroleum Minister to make regulations is for the purpose of implementing the Petroleum Act, and therefore, cannot be extended to CITA. The grave implication of this vacuum is that it concedes a wide and unguarded discretion to the Petroleum Minister to extend or not to extend the tax relief period for a company in downstream gas utilization, as a company's meeting of "satisfactory performance" would wholly be at the say-so of the Minister. The susceptibility of such enormous powers to abuse calls for amendment of Section 39(1)(a) by subjecting the determination of "satisfactory performance" therein to the terms of a regulation by the Minister.

While it would seem that Section 11 of PPTA and Section 39 of CITA have clearly demarcated gas utilization incentives in the upstream and downstream sectors respectively, a mix-up of the two regimes is still possible, and has indeed occurred to draw judicial intervention for its resolution. In Chevron Nigeria Limited v. FIRS¹⁴ Chevron was involved with NNPC in a joint venture for the development of the Escravos Gas-to-Liquids (EGTL) Project. In its petroleum profit tax returns, Chevron claimed Petroleum Investment Allowance (PIA) at the rate of 35% on the project. FIRS disallowed the claim with the contention that a claim of PIA should be at the rate of 5% prescribed under PPTA and not at the 35% rate in Section 39 of CITA. The Tax Appeal Tribunal noted that the project was a downstream gas utilization project which entitled the Appellant to claim investment allowance at 35% as set out under CITA. The tribunal thus held that nomenclature notwithstanding, Chevron was entitled to claim investment allowance at the rate of 35% provided for in CITA in respect of its downstream gas project against its Crude Oil Profits.

The key consideration therefore, was whether Chevron was engaged in downstream gas utilization, and not what it chose to call the allowance it claimed for the said project. However, just as it was earlier recommended that companies should clearly identify their gas income and the dividend arising therefrom in the midst of other income and dividend streams, it is advised here that the reliefs claimed from gas utilization downstream or upstream should be specified depending on the particular sector between the two where the project belongs. A mix-up of the incentives or misapplication of the varying designations would yield such avoidable disputes from Section 11 of PPTA and Section 39 of CITA as the Chevron case above.

Apart from the income tax reliefs in Section 39 of CITA, Part I of the First Schedule to the Value Added Tax Act¹⁵ exempts from value added tax, Plant, machinery and equipment purchased for utilization of gas in downstream petroleum operations.

PIONEER STATUS INCENTIVES

Pioneer status refers to incentives by way of tax holiday to companies in industries that are new or with declining investment. The essence is to encourage investment and facilitate growth of such sectors.

Pioneer status was introduced by the Industrial Development (Income Tax Relief) Act, 1971 (IDA), made retroactive to April, 1970.¹⁶ Under this law, companies with pioneer status enjoy the following incentives:

• Tax holiday for three years, which can be extended for a period of one year and thereafter another one year, or a single extension of two years, with the entire relief period amounting to five years.¹⁷
• Dividends from the tax-exempt profit of a pioneer company, received by a shareholder in the pioneer company exempt from tax in the hands of that shareholder, subject to the determination of FIRS as to compliance in respect of an account created for pioneer profit from which the dividend is paid.¹⁸

There is no strict provision in the law foreclosing any industry from this incentive. IDA creates an open-ended space for industries and products to be brought under the pioneer list. The act states that where the President of Nigerian is satisfied that any sector or industry in the economy is not being undertaken on a scale suitable to the economic advancement of Nigeria or that it is in the public interest to encourage the further development or establishment or advancement of trade in such sector or industry, the President of Nigeria is authorized to publish in a Gazette, a list of such industries to who qualify for pioneer status.¹⁹ Accordingly, the Federal Government of Nigeria has by occasional release of official gazettes increased the list of pioneer industries and products.

In line with its powers to make regulations under the NIPC Act,²⁰the NIPC released the Pioneer Status Incentives Regulations of 2014 ("the Regulations"). The Regulations further provides that when making an application for Pioneer Status to the NIPC, the applicant must submit the relevant regulatory license to operate in the sector or business activity.²¹

The gazetted list of pioneer products and industries, 2017 in its item 81, lists "Electricity and Gas Supply" as a pioneer sub-sector, and "Manufacture of Gas, and Gas distribution as a pioneer industry". The gazette however specified limited pioneer products under these classes.²²

Section 6(11) of the IDA prescribes capital expenditure thresholds to qualify a company for pioneer status. A foreign company, seeking the relief must have incurred a capital expenditure of not less than N 150,000, while an indigenous company must have incurred a minimum capital expenditure of N 50,000 on or before its Production Day. However, the Pioneer Status Incentives Regulations of 2014 sets N10, 000,000 as the common capital expenditure benchmark for Indigenous and foreign companies. Section 25 of the Industrial Development Act defines "production day "as the day on which the trade or business of a pioneer company commences for the purposes of the Companies Income Tax Act. That is also the day from which the pioneer period counts.

COMPARING AND CONTRASTING BETWEEN PIONEER STATUS AND DOWNSTREAM GAS UTILIZATION INCENTIVES

The most obvious common feature between pioneer status and the downstream gas utilization incentives is the tax holiday periods. Pioneer status creates an initial tax relief period of three years, renewable either twice of one year period each, or once of two-year period, making up a maximum of five years. As if in replication of this, the key incentive for downstream gas utilization is an initial tax-free period of three years which may renewable by an additional period of two years. However, this common attributes of tax holidays also disclose marked differences in the cases of the two sets of incentives. The renewal period for pioneer status can be split, but gas utilization incentive period is renewable only once. Furthermore, for pioneer status, Section 3(6) of the IDA creates an exception to the initial period and renewals in section 10 in two instances: where a company has acquired or proposes to acquire assets from any company to which a pioneer certificate has been granted under the Aid to Pioneer Industries Act, or the IDA; and where a company has taken over or proposes to take over the whole assets of any other company which is not a pioneer company. In either of these two cases, the pioneer certificate to be granted may specify a maximum tax relief period, not exceeding five years. In other words, the five years tax holiday can be granted in one swoop, and not split between an initial three years and extended periods.

A more significant difference on the tax relief periods relates to the renewal of the periods for the two classes of incentives. While Section 39 of CITA makes a vague provision on the criterion for renewal of the period by merely subjecting it to "satisfactory performance", Section 10(3) of the IDA clearly stipulates the conditions for renewal of pioneer by the President of Nigeria, namely the President's satisfaction in respect of:

1. the rate of expansion, standard of efficiency and the level of development of the company;
2. the implementation of any scheme-
   1. for the utilization of local raw materials in the processes of the company; and
   2. for the training and development of Nigerian personnel in the relevant industry;
3. the relative importance of the industry in the economy of the country;
4. the need for the extension, having regard to the location of the industry; and
5. such other relevant matters as may be required.

Section 10 (1) of the IDA provides that the tax relief period of a pioneer company shall commence on the date of the production day of the company. This production day is defined in Section 25 of the Act to mean the day on which the trade or business of a pioneer company commences for the purposes of the principal Act (i.e. CITA). Likewise for downstream gas utilization, Section 39 (2) of CITA provides that the tax-free period of a company shall start on the day the company commences production as certified by the Ministry of Petroleum Resources. The difference here is that for the former, the commencement date for the relief period is predetermined by law, while for the latter, it is decided administratively by the Petroleum Minister.

Unlike pioneer status, Section 39(1)(b) of CITA creates an alternative to the initial tax-free period in  downstream gas utilization incentives, in the form of an additional investment allowance of 35% which if claimed by a company, the company cannot further claim the additional investment allowance of 15% in Section 39(1)(c)(ii).

Both pioneer status and downstream gas utilization incentives provide for tax-free dividends during the tax holiday. For pioneer status, dividends are to be debited to an account created for pioneer profits under Section 17(1) of IDA, and FIRS must be satisfied with the entries in the account before the dividends can be exempted from tax in the hands of a shareholder of the pioneer company.²³ For downstream gas utilization, the condition for tax exemption of the dividends is that: the investment for the business is in foreign currency; or the imported plant and machinery during the period is not less than 30 percent of the equity share capital of the company.²⁴

There used to be a common limitation on the pioneer industry and downstream gas utilization companies requiring the prerequisite consent of the Minister in respect of loans. Section 18(b) of the IDA forbids a company during its pioneer period to grant any loan without first obtaining the consent of the Minister for Industry, whose consent shall only be given if he is satisfied that the pioneer company is obtaining adequate security and a reasonable rate of interest for any such loan. By virtue of Section 39(1)(e) of CITA, interest on any loan obtained by a downstream gas utilization company for a gas project during the tax relief period would be tax deductible only if the loan is obtained with the prior approval of the Petroleum Minister. However, in the case of downstream gas utilization, the Finance Act, 2019 has dispensed with the requirement of ministerial consent for tax deductibility of the loan interest.

While capital expenditure threshold of N10, 000, 000 is required to qualify a company for pioneer status, there is no capital expenditure prerequisite for a downstream gas utilization company to benefit from the incentives in Section 39 of CITA.

DOES PIONEER STATUS APPLY TO DOWNSTREAM GAS UTILIZATION?

As earlier stated, there is no provision in IDA foreclosing the inclusion of any industry or product in the pioneer list. In fact, the act in its opening part indicates a discretion on the President to expand the pioneer industry list with any industry or product that is either at the teething stage, or where investment and activities do not reflect national economic interest.  

The primary factor for inclusion of an industry in the pioneer list is whether that industry falls under the substantive legal regime for pioneer status, namely CITA. From the provisions of IDA, it is clear that pioneer status is limited to Companies Income Tax, and does not apply to Petroleum Profit Tax. IDA copiously refers to the Companies Income Tax Act as "the principal Act." Precisely, Section 25 of IDA defines "principal Act" to mean the Companies Income Tax Act; and also defines "production day" for the take-off of the incentive as the day on which the trade or business of a pioneer company commences for the purposes of the principal Act, i.e. CITA; and further confines pioneer status to CITA by defining "qualifying capital expenditure" to mean capital expenditure of such a nature as to rank as qualifying expenditure for the purposes of the Second Schedule to the principal Act, i.e. CITA.²⁵

Specifically in respect of gas, the gazetted list of pioneer products and industries, 2017 now has now added "Electricity and Gas Supply", and "Manufacture of Gas, and Gas distribution to the pioneer list.

One of the recent grants of pioneer status included three companies which either use natural gas as feedstock or convert and distribute products of natural gas. These are: Indorama Eleme Fertiliser in Rivers State, which is reported to have invested ₦360 Billion on the facility for which it was granted the incentive; PNG Gas Limited, located in Delta State, with investment of ₦13 Billion to produce and market Propane; and Lagos-based Power Gas Delta Innovations Limited, engaged in "gas manufacture and distribution", which was granted the Pioneer status for its investment of ₦8.7Billion.²⁶

KEY CHANGES UNDER THE FINANCE ACT, 2019

The Finance Act, 2019 brought significant amendments to Section 39 of the Companies Income Tax Act (CITA), with respect to incentives available to investors in downstream gas utilization operations. The key changes introduced by the Act are as follows: i. abolition of the requirement for Ministerial approval before treating interest on loans obtained for gas operation as a tax-deductible expense. Thus, from the commencement of the Finance Act, a downstream gas utilization company need not obtain the consent of the Petroleum Minister to seek loans for interests it would incur on those loans to be deductible from income tax. Secondly, companies cannot claim capital allowances (CA) both under the provision of the CITA and under the Industrial Development (Income Tax Relief) Act, i.e., the enabling law for pioneer status incentive. This amendment is aimed at avoiding a double claim of tax incentives by gas operators.

Most far-reaching in the Finance Act, is the addition of a subsection 3 to Section 39 of CITA, with the provision that a company which has claimed the incentives for to the effect that a company which has claimed or intends to claim the incentives in the IDA can no longer benefit from the provisions of Section 39 of CITA on gas utilization (downstream operation) in respect of the same qualifying capital expenditure.²⁷ By this provision, the Finance Act has clarified that companies enjoying gas utilization incentives in respect of their qualifying capital expenditure cannot access Pioneer Status Incentive on the same project/assets. This seals the alternative applications of pioneer status and downstream gas utilization incentives.

Furthermore, Section 7 of the Finance Act excluding from the effect of Section 19 CITA profits exempted from IDA (pioneer profit). Section 19 of CITA provides that when dividend paid out by a company exceeds the total profit in the record of that company, the dividend would be taxed in lieu of the profit. The usual point of dispute on this provision is that the application of Section 19 of CITA has never reckoned with the source profit of the dividend, and whether that source has previously suffered tax or is exempted from tax by law.²⁸ Once the dividend paid out exceeds total profit in the company's records, the dividend gets subjected to income tax as if it were the profit. With this, pioneer profit risked taxation under Section 19 of CITA when it added to dividends paid out that exceeded total profits; especially considering that Section 18(a) of IDA forbids a pioneer company to distribute dividends to its shareholders in excess of the credit balance of an account created for its tax-exempt profit under Section 17(1) of the act.  But now, the Finance Act has clarified that pioneer profit cannot be subjected to Section 19 of CITA to be taxed as excess dividend. This exemption would also apply to dividend paid out of the profit of a downstream gas utilization company during the tax-free period as Section 7 of the Finance Act extends the exemption to "any other legislation", beyond IDA, Petroleum Profit Tax Act and Capital Gains Tax Act which are specifically mentioned in that section.

CONCLUSION

The desire to mitigate gas flaring and actualize potentials from the abundant reserve and multiple uses of gas remain the twin factors driving the incentivization of gas utilization in Nigeria. In respect of income tax, exclusive incentives for downstream gas utilization are provided for in CITA. These hold many strikingly common features with pioneer status incentives as highlighted in the foregoing analysis. Pioneer status incentives apply generally to companies under the companies income tax regime, and therefore avails downstream gas utilization companies. The Finance Act, 2019 makes pioneer status mutually exclusive with the CITA incentives for downstream gas utilization. However, further legislative steps are necessary to balance the alternatives offered by these two incentive regimes. For instance, CITA should prescribe the specific criteria for renewal of the initial tax-free period, just as the IDA does for pioneer status. For pioneer status, the cost and rigours of application diminish its attractiveness as an alternative to the CITA incentives, and therefore warrant legislative intervention. Most glaring is the fact that the Pioneer Status Incentives Regulations of 2014 introduced a service charge of 2% of the applicant company's estimated tax savings, derived from financial projections on the five-year pioneer period which is to be paid in the course of the application. This has been decried as disguised taxation of the prospective profit for which tax exemption is being sought through pioneer status.²⁹

Footnotes

1. DPR, June 4, 2020. Nigeria's Proven Gas Reserve Now 203.16tcf, Says DPR.

  https://www.dpr.gov.ng/nigerias-proven-gas-reserve-now-203-16tcf-says-dpr/

2. Ibid.

3. Grant, G., Investment Opportunities in Nigeria's Gas Sector, Johannesburg, South Africa at the 1995 Sub-Saharan Oil & Minerals Conference.

4. Section 11 of the Petroleum Profit Tax Act provides for upstream gas utilization incentives, while Section 39 of the Companies Income Tax Act is the equivalent for the downstream.

5. Section 15, Petroleum Act.

6. Section 11 of the Petroleum Profit Tax Act.

7. Section 12 of the Petroleum Profit Tax Act.

8. Cap A25, Laws of the Federation of Nigeria, 2004.

9. Section 11(1) (a) and (b), PPTA.

10. Section 16 of the Finance Act, 2019 has amended Section 40 of CITA which stipulates the 30% tax rate, by now creating three tax rates based on various gross turnovers of companies taxable under CITA. Companies with gross turnover of N25 Million or less are exempted from companies income tax; those with gross turnover above N25 Million and but below N100 Million are taxed at 20%; while those with annual turnover of N100 Million and above are taxed at 30%. These new CITA rates would apply to a company in respect of its gas income. 

11. Suit No: FHC/L/4A/2015.

12. TAT/LZ/012/2014

13. Section 60 of the PPTA has been repealed by Section 24 of the Finance Act, 2019.

14. 21 TLRN 26.

15. Cap V1, LFN 2004.

16. Industrial Development (Income Tax Relief) Act (IDA), Cap. I7 LFN, 2004

17. Section 10(2)(a)(b), IDA.

18. Section 17(3), IDA.

19.Section 1 of the Industrial Development (Income Tax Relief) Act.

20. Op. cit. Section 30.

21.Section 3 of the Regulations.

22. Federal Republic of Nigeria, Official Gazzette No. 84 (Vol. 104), 14^th August, 2017.

23. Section 17(3), IDA.

24. Section 39(1) (d) (i) & (ii), CITA.

25. Section 25, IDA.

26. Africa Oil & Gas Report February 25, 2019. Three "Gas Monetisation" Companies Still Enjoy Nigeria's Pioneer Incentive Status. https://africaoilgasreport.com/2019/02/gas-monetization/three-gas-monetisation-companies-still-enjoy-nigerias-pioneer-incentive-status/

27. Section 15, Finance Act, 2019.

28. The courts have consistently arrived at this conclusion in applying the literal rule to Section 19 of CITA in decisions like OANDO Plc. V. FIRS (Appeal No. CA/L/409/2008) delivered by the Court of Appeal on 24th March, 2015; OANDO Plc. V. FIRS (2016) 26 TLRN 56 a decision of the Federal High Court; and even lately in ECOBANK NIGERIA LIMITED V. FIRS TAT/LZ/CIT/024/2018 delivered on 20th of February, 2020 where the Tax Appeal Tribunal applied the mischief rule in interpreting that Section.

29. Okoro, J. 2020. Re: FG Grants Tax Holiday to 25 Companies – A Review of Pioneer Status Tax Relief. https://dnllegalandstyle.com/2020/re-fg-grants-tax-holiday-to-25-companies-a-review-of-pioneer-status-tax-relief-dr-jerome-okoro/.

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