Nigerian musicians to receive tax breaks

The information was made public through a statement issued by Lai Mohammed, Nigeria’s Minister of Information and Culture, after a pledge by Acting President Yemi Osinbajo to grant ‘Pioneer Status’ to the creative industry. Osinbajo’s pledge was delivered by Minister of Finance Kemi Adeosun at the 17 – 18 July Creative Industry Finance Conference.

“This is a shot in the arm for the Creative Industry, and it will definitely catalyse investments in the industry,” said Mohammed. “It is also the answer to our quest to spur the establishment of world class studios in Nigeria for production and post-production of movies and music videos.”

Though the minister also said that “it is a measure of the increasing importance attached to the industry by the federal government that these issues are now being handled with utmost urgency”, the speedy implementation of the decision will be viewed in some quarters as response to the controversial plan to ban Nigerian artists from shooting videos abroad.

Reactions to the ban plan were derided by figures in the Nigerian pop music industry, some of whom accused government officials of hypocrisy. “Let all of you stop going abroad when you are sick as it is Nigerian money you people use to patronise foreign hospitals,” said Jude Okoye, brother and former manager of popstar duo P-Square.

In the statement which addressed other issues concerning Nigeria's creative sector, Mohammed added that, “First, the ‘Pioneer Status’ has been granted within three weeks of the conclusion of the conference. Secondly, an Anti-Piracy Committee, comprising representatives of the Federal Ministry of Information and Culture, industry stakeholders and the police, has been set up to work out the modality for tackling piracy in a lasting and sustainable manner.”

Pioneer Status gives receiving industries and products a tax holiday. It covers: music production, publishing and distribution (including online digital distribution); photography; production and post-production of digital content for motion pictures, videos, television programmes, commercials, distribution and exhibition (digital movies, animation, videos, tv programmes and commercials); publishing of books (copyrighted books) and development and Publishing of ready-made software (operating systems, software applications and computer games).

These industries and products are exempted from paying corporate income tax and withholding tax on dividend. The tax holiday given to 'pioneering' entities lasts three years and via negotiation may stretch to a total of five years.