To corroborate claims on its readiness to key into the Federal Government Tax Credit Scheme, the Nigerian National Petroleum Corporation (NNPC) has handed over a ₦621 billion cheque to the Ministry of Works and Housing for the construction of 21 roads nationwide.
This singular act by the NNPC has laid to rest insinuations that the federal agency intends to oversee the road construction, taking over the Ministry of Works core mandate.
As with the first activation of the Obajana-Kabba road as well as the Apapa-Oworonsoki expressway, this move is in line with Executive Order 7 of the tax credit road infrastructure funding arrangement approved by the Federal Executive Council (FEC).
Over the years, big players like Aliko Dangote has come to the rescue of the government in delivering critical infrastructure with a tax credit as a return. Smaller companies are also empowered by the scheme to come onboard.
On its wide acceptance, the Minister of Works and Housing, Mr. Babatunde Fashola in a recent address had revealed that the telecoms sector had also begun to show interest in the arrangement, with a promise to leave the tax credit as earlier reviewed; eradicating futuristic review.
As for perks of the scheme, the minister revealed that the scheme will redefine project funding in the sector with the capacity for contractors to order more materials and machines to implement.
In addition, to ensure that timelines are adhered to, he stated that the works ministry has a prescribed number of days within which to act, to approve the certificates.
FIRS’ Comments on the Scheme
While the NNPC presented the huge cheque, the FIRS Chairman, Muhammed Nami, explained that the scheme encourages taxpayers to use company income tax payable by them to fix any critical infrastructure in exchange for the tax credit.
The tax administrator highlights that out of the 21 roads to be constructed by NNPC, eight are in north-central, three are in the north-east, two in the north-west, two in the south-east, three in the south-south, and two in the south-west.
In all, Nami summed up that the scheme will help bridge the critical infrastructure gap that Nigeria faces.
See what the Ministry of Works and Housing through Fashola is saying,
“So, this is not an order for one person, it is an order for all businesses and we are now seeing that a conglomerate like Dangote Group and now the oil industry has come in to cover 21 roads of about 1,800 kilometres. That is massive and it’s a show of confidence by the NNPC,” he noted.
“We have agreed that nobody will be asking for a variation. We have put in a governance process which allows us to do certification within a certain number of days,” he said, adding that, “The NNPC will have no more than 30 days to pay.”
“The money does not belong to the contractors. It is going to the quarry, to those supplying diesel, sand, lubricants, and other materials,” the minister said.
“NNPC is not taking over roads, NNPC is not constructing roads, NNPC is just putting forward its tax liabilities to the authority which is supposed to collect, which is the FIRS, and they are dedicating it to build roads that have been awarded and would have been completed but for insufficient budgetary provisions.