The Federal Government making agriculture the new goldmine is still a discourse very much active as small and medium-sized companies engaged in primary agricultural production will now enjoy a tax-free period of four years which may be extended for an additional maximum period of two years.

It disclosed this in the recently signed Finance Act, 2020, adding that the affected companies would enjoy the tax exemption according to an application to the President, through the minister.

The Act described a medium-sized company as a company that earns gross turnover greater than ₦25,000,000 but less than ₦100,000,000 per annum, or as otherwise defined by the Companies Income Tax Act.

The Act read in part,

“Any small or medium-sized company engaged in primary agricultural production shall be granted, according to an application to the President, through the minister, an initial tax-free period of four years.

“This may be extended, subject to the satisfactory performance of such primary agricultural production, for an additional maximum period of two years, and such company cannot be granted similar tax holiday incentive under any other Act in force in Nigeria.”

Explaining primary agricultural production, the Act stated that this includes primary crop production comprising the production of raw and semi-processed crops of all kinds, but excluding any intermediate or final processing of crops or any other associated manufactured or derivative crop product.

It also includes primary forestry production comprising the production of timbers of various kinds such as firewood, charcoal, uncultivated materials gathered, and other forestry products of all kinds, including seeds and saplings, but excluding the intermediate and final processing of timber and any other manufactured or derivative timber product.

It also includes primary fishing production comprising the production of fish of all kinds, such as ornamental fish, but excluding any intermediate or final processing of any other manufactured or derivative fish product.

The Act further described a small-sized company as one that earns gross turnover of ₦25m or less per annum, or as otherwise defined by the Companies Income Tax Act.

Others include primary livestock production comprising the production of live animals and their direct produce such as live or raw meat, live or raw poultry, fresh eggs, and milk of all kinds, but excluding any other associated manufactured or derivative livestock product.

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