TITLE PAGE                                                                                   
APPROVAL PAGE                                                                           
TABLE OF CONTENTS                                                                    
LIST OF TABLES                                                                             
Background of
the study                                              
Statement of
the problem                                                         
Purpose of
the study                                                      
of the study                                               
of the study                                                        
II                 REVIEW
OF LITERATURE                                           
Definition of
Pioneer Income Tax Relief                         
The Legal
Companies under the Nigeria Tax Law               
for Granting Pioneer Status                                   
and Requirement for Application for a
Advantages of
Pioneer Status                                       
Terms of
Pioneer Certificate                                          
Account and Tax Relief                                                
Functions and
Power of Investment Incentives                    
Main and
Other Tax Incentives in Nigeria                            
III                METHODOLOGY                                                          
Source of
Area of
Population of
the study                                                  
Sample of the
of the instrument                                                
analytical technique                                                         
Test of
V                 SUMMARY,
Appendix A                                                                      
Appendix B                                                                    
Appendix C                                                                     

Table 1: Analysis and
interpretation of question 1
Table 2: Analysis and
interpretation of question 3
Table 3: Analysis and
interpretation of question 4
Table 4: Analysis and
interpretation of question 7
Table 5: Analysis and
interpretation of question 8
Table 6: Analysis and
interpretation of question 9
Table 7: Analysis and
interpretation of question 10
Table 8: Analysis and
interpretation of question 11
Table 9: Analysis and
interpretation of question 12
Table 10: Analysis and
interpretation of question 16
Table 11: Analysis and
interpretation of question 17
Table 12: Analysis and
interpretation of question 20
Table 13: Analysis and
interpretation of hypothesis 1
Table 14: Analysis and
interpretation of hypothesis 11
Table 15: Analysis and
interpretation of hypothesis 111
Table 16: Analysis and
interpretation of hypothesis 1V

The study critically
examined and evaluated the relevance of pioneer income tax relief as an
alternative Investment incentive to companies. Primary data were collected from
fifty three existing pioneer industries in ondo state. Simple percentage was
used to analyses the data collected while T-test was used for the test of the
hypothesis formulated. It was discovered from the analysis that income tax
relief was a major factor in the establishment of pioneer companies and also
plays a contributory role in the proliferation of such companies. Also from the
hypothesis we discovered that investment have not actually harnessed the
potentials inherent in pioneer income tax relief due to their level of
awareness. The study was concluded by recommending that conditions attached to
the granting of pioneer status be reviewed and bureaucratic process involved in
granting the status eliminated.  


Background of the Study
is an attempt to discuss the various issues relating to pioneer income tax in Nigeria.
Using fifty three [53] existing pioneer companies in ondo state.
history of taxation in Nigeria dates back to the era of Sahara trade and the
introduction of Islamic–religion in Nigeria were made between 500AD and 1400AD.
The rulers in the northern Nigeria were known as ‘‘SAFAWA’’ kings, who grew
rich due to gifts and levies paid to the subordinate as taxes on cattle and
agriculture crops. The Islamic religion later introduced other various forms of
the first legal backing of taxation was in 1904 when Sir Fredrick laggard
introduced the native revenue proclamation. [ICANstudent’s journal.July/Sept
2007 Vol 11, No3Page 15].
companies are companies certified by any pioneer certificate to be a pioneer
company which enjoy the tax holiday for at least five years, is granted to
companies with pioneer status on the basis of newness and relevance of the
products of the companies. The enabling law that gives power to the federal
republic of Nigeria to grant this relief is the industrial development income
tax relief act of 1970 [NOW cap 179.LFN, 1990].[Nworji 2004]. Going by the
meaning of pioneer income tax relief, one would say that there are supposed to
be a lot of pioneer companies around us. But the reverse is the case. For
instance Ondostate where the companies used as case studies is situated, how
many pioneer companies used as a case studies do they have and how many
operational. The information from ministry of commerce and industry revealed
that, though 53 of the industries are pioneer industries yet they are not
operational. Some are moribund, otherunder privatization.
essence of pioneer income tax relief was to encourage the development and
establishment industries that will use our local raw materials in manufacturing
different product like Oluwa glass plcIgbokoda, its source of raw material was
in Igbokoda yet the company is not working in full capacity for sometimes now.
Some of
the small scale manufacturers don’t even have the knowledge of the tax reliefs.
the study there are one hundred and seventeen [117] industries scattered in the
eighteen [18] local government area of Ondo state. Out of which fifty three
[53] are engaged in the manufacturing of pioneer products, while the remaining
are in other different types of business. Despite the fact that government want
to use the relieve as incentive to encourage investor to go into local
manufacturing and trade to enhance economic growth, yet our investors are not
taking the advantage.
Brief History of the State
state was created on 3rd February 1976 with akure as the state
capital line between longitudes 4’’ 30’’and 6’’00’’ East of the green wish
meridian and latitudes 5’’ 45’’ and 8’’ 15’’ North of the equator. OndoState is
entirely within the tropics. It is surrounded by Atlantic Ocean in the South,
Ogun and OsunStates in the West, Ekiti state in the North, Edo and Delta state
in the East with over 10,595 square kilometers in Nigeria. The geographical
landscapes comprise lowland and rugged hills with granite outcrop in several
Brief History of two Of the Companies UnderStudy
Okitipupa Oil Mill Industry Plc.
oil mill industry is a 20tonnes capacity plant located in Okitipupa Local
Government Area of Ondo State. The oil palm industry was established as a
project by World Bank, federal government and the southern region then in 1968.
The oil palm estate as was called had ten plantations that cover three local
governments in the state. OkitipupaLocal, Irele Local Government and EseOdo
Local Government Area. Under Okitipupa, it has seven estates namely Igbotako,
Ilu Titun, Ikoya, Aye, Okitipupafarm settlement, Erinye and Isowa. Under ESEOdo,
it has Apoi estate, under Irele, it has two, Ireleand Iyan San Estate.
          Though Irelewas the first local government where oil mill
was located and that prompted the then government to establish the oil mill there
due to nearness of raw material. And as a result, oil mill Irelewas part of the
company established. In 1974 oil mill Okitipupawas commissioned and the Nigeria
joint agency limited [NJAL] was appointed to manage the company until 1981. And
it was after then that the company had its own board of directors.
In 1976
the company was incorporated as a limited liability company. In 1989, it went
into capital market and became public limited company [PLC] in 1990.
          Though at present the company is under receivership as a
result of loan secured in 2007 which it was unable to pay back and now the
company is not working at full capacity.
          It has different departments like agricultural service department,
processing department, administration and personnel department, accounts and
commercial departments with about 1526 employees. The company produces red oil
and palm kernel and both have high market demand.
Stanmark Cocoa Processing Company Limited [SCPC]
          Stanmark Cocoa Processing Company Limited is a 12,500 tones
capacity plant located in Ondo town, Ondo state and about 275km from Lagos,
Nigeria. Ondo state account for about 70% of Nigeria Cocoa output. So the
company is located right in the heart of its main source of raw materials.
The company was
established in 1953 under aegis of British administration to supplement the
high demand for cocoa products in the international market. The company started
production at a low capacity with the aim of buying cocoa seeds from the then
farmers, packaging same and exporting them to Europe and other countries of
high demand, with the work force of about seventeen indigenous workers and four
foreigners the company could not explore the cocoa potentiality of their host
religion and its environs, hence was not able to make up the challenge posed by
the high demand and in the international scene. And this made it not to create
a niche in cocoa production as at then.
in 1975 after the exit of foreigners in Nigeria cocoa market, experienced
indigenous cocoa merchants came together and took over the company with the
sole aim revitalishing it and doggedly taking over the cocoa market and that
marked the birth of Stanmark cocoa processing company limited. The key
stakeholders looked tirelessly to take over the market share in cocoa
production and thereby moved from mere stock.
climate is tropical with two distinct seasons, the rainy season [April-October]
and dry season [November-March]. The annual rainfall varies from 200cm in the
southern part of the state to 1.151cm in the northern area. Rainfall decrease
in amount and distribution from the coast to the hinder land.
people of the state are mostly Yoruba, comprising mainly the Akoko, Owo, Ondo,
Ikale, Ilaje and Akure ethnic groups. Others inhabitant are the apices and
arogbos who are ijaw. Generally the people of the state have same way of life;
including culture, tradition, and costom.Thelanguage of communication are
Yoruba, Ijaw, and English.
1991 census puts the population of the state at about 2,249,071 Withgrowth rate
of 2.8% per annum about 45% of the population lives in urban areas while 55%
lives in the rural areas.
is the main occupation of the people providing income and employment for over
75% of the population of the state. It also contributes over 70% of the state’s
grossdomestic product [GDP]. The main cash crops are cocoa, palm products and
the riverine areas of the state specialize in fishing, lumbering, beat building
and gin production. There are large scale industries in the state, which are
mainly government owned, or where it is largest shareholder. These include oluwa
glass at igbokoda, oil palm factories and plantation at okitipupa, irele, and
igbotako other are NIROWI wood company, premier metal industry both at ondo,
cocoa Product Company in the riverine area. Bitumen also bounds ode irele and okitipupa
local government area.
small scale industries are mainly private initiatives.
include poultry, bakery, sawmills, metal fabrication outfits, woodworks and
carpentry. Some people find employments in the civil service and other private concerns
which specialize in profession such as tailoring and cloth weaving [ASO-OKE].
The industrial climate of the state is favorable and as a result, prospective
industrialists in the state can benefits from an array of mineral resources
that abound them.
among the mineral resources already identified are bitumen and tairs in the
southern part of the state, clay at Erusu in Akoko north- east  and at Alade others include granite at
Idanre,iron ore at Akunnu and Akungba in Akoko south- west local government
transportation with the state is facilitated by a good road network. There is
an airport located at Akure, the state capital-most town in the state are
linked by tarred road and also the marble at supare.
variety of tourist-attractions abound in the state. The popular ones include
Idanre hills located at Idanre, Oke-Maria at Oka-Akoko, EbomiLakein Ipesi and
the Ayetoro holy apostle’s community island. Having taken an overview of Ondo
state, one could rightly conclude that there has been a remarkable economic
development considering what it was by February, 1976.
since small scale  industries were set up
primarily to promote productive activities in the rural settings, boast the
industrial potential of the state at the grass roots, therefore, there is need
to evaluate the relevance of pioneer income incentive to the industries and
exporting of cocoa seed to processing with the new wide horizon of its
responsibilities, the company sky-rocketed its work force from about
twenty-eight[28] to three hundred and eighty-five[385] comprising of
administrative officers, factory workers, field workers[farmers] and
distributors of their products.
renaissance rekindled the interest of the international community and
consequently marked a new dawn in cocoa business in Nigeria. The mavice continues
to grow in strength and capacity fill many countries depended on Nigeria to
meet their cocoa raw materials needs.
In the
middle of eighties, the company suffered a major setback due to global economic
crisis. It is foreign allies who were their major consumer withdraw and as a
result, it’s teeming workforce of about one thousand seven hundred and ninety five
[1,795] were laid off to about two hundred and fifteen [215] and this brought
the market to a standstill. The company continued to stagger on the path of
recovery till in 1992 when cads bury Nigeria plc.Embarked on a redemption move
to salvage the company from its economic quagmire by buying 98% of its share
capital. And that made the company till today to be a subsidiary of cad bury
Nigeria plc. Thereafter, it widened its product line which now include cocoa
cake, cocoa butter, cocoa powder, and major, if not the only producer of cocoa
liquor which has the European economic standards for cocoa. Liquor and the only
company in Nigeria trading on cocoa liquor on the London terminal market.
Statement of the Problem
The act
which established industrial development income tax relief of 1970[NOW CAP
1791FN] 1990 according to Nworyi [2004] has it purpose to encourage the growth
of our local industries that produce pioneer products. The aim of the
government was to have enough of the industries listed as pioneer industries in
order to help boast the economy and development of new or relevant industries that
will reduce the countries dependent or importation of essential goods and
service. Yet, we have not had enough of them till now.
Some of
these industries that exist are not effectively in operation while some had
gone moribund despite the fact government made a provision for them. However,
the act was enacted encourage investors to go into production of the pioneer
product to enhance economic development not only to Nigerian investors but also
to foreign investors.
In ondo
state, a survey of industries shows that some of them had gone into extinction.
Moreover, investors seem not to be interested in establishing these industries
that enjoy pioneer relief. However, it seems researcher had not gone into this
area of study.
It is
therefore the intention of this research study to investigate the relevance of
the pioneer income tax as an alternative investment incentive on the growth of
pioneer industries in ondo state.
Purpose of the Study
The objective
of this research work isan evaluation of the relevance of the pioneer income
tax relief on pioneer companies.
The sub objectives are:
1.      To know whether pioneer relief stimulates
economic development by encouraging massive establishment of pioneer industries
2.     To
know whether pioneer relief provides an investment incentives to foreign
3.     To
know why most of the investors are not going into pioneer products?
4.     To
know why till now they do not have enough pioneer in the state?
5.     Moreover,
to evaluates the essence of the incentives by the government.
Significance of the Study
research work will afford students, industrialist and the general public the
opportunity to know the relevance of the pioneer income tax relief as an
alternative investment incentive.
It will
help the users to know the important of pioneer income tax and how to go about
it in enhancing the growth and development for our new companies.
Delimitations of the Study
The scope of the study is Ondo State while the fifty-three
[53] existing companies in the state will serve as the population of the study.
the researcher will not attempt to discuss the overall relevance of the pioneer
income tax relief of the whole companies in Nigeria nor that of any other
country of the world.
Research Questions
(1)       To
what extent are investors aware of the existence of pioneer relief?
(2)       Why
do Nigeria investors prefer non-pioneer industries?
(3)       What
is the relationship between the pioneer relief as an incentives and industrial
growth, economic development?
(4)       To
what extent does the pioneer relief as an incentive encourage foreign
investment in Nigeria?
(5)       To
what extent is pioneer relief to companies fulfilling the objectives for which
it was establish?
H01: Nigeria
investors are not significantly aware of the existence of pioneer relief.
H02: Nigeria investor’s
preference for non-pioneer industries has no relationship with pioneer relief.
H03: There is
no significant relationship between income tax relief granted to pioneer
companies and investment flow of foreign equity.
H04: There is
no significant relationship between income tax relief to pioneer companies and
investment improvement of the companies.


Complete Project Price: ₦3,000 (We accept mobile tranfer)

» Bank Branch Deposits, ATM/online transfers (Amount: ₦3,000 NGN)

Bank: FIRST BANK Account Name: OMOOGUN TAIYE Account Number: 3116913871 Account Type: SAVINGS Amount: ₦3,000 AFTER PAYMENT, TEXT YOUR TOPIC AND VALID EMAIL ADDRESS TO 07064961036 OR 08068355992 OR Click Here

Bank: ACCESS BANK Account Name: OMOOGUN TAIYE Account Number: 0766765735 Account Type: SAVINGS Amount: ₦3,000 AFTER PAYMENT, TEXT YOUR TOPIC AND VALID EMAIL ADDRESS TO 07064961036 OR 08068355992 Click Here

Bank: HERITAGE BANK Account Name: OMOOGUN TAIYE Account Number: 1909068248 Account Type: SAVINGS Amount: ₦3,000 AFTER PAYMENT, TEXT YOUR TOPIC AND VALID EMAIL ADDRESS TO 07064961036 OR 08068355992 Click Here


Send Your Details and Project topic To us by filling this form.