The Federal Inland Revenue Service (FIRS) plans to meet with the Central Bank of Nigeria (CBN) and Ministry of Works this Friday to review about N2.59 trillion tax credit scheme meant for road repairs and construction in the country.
Zacheus Adedeji, the Chairman of the FIRS, also expressed strong disapproval of the N2.59 trillion tax credit scheme initiated under the administration of former President Muhammadu Buhari. This scheme, aimed at facilitating road construction across Nigeria, is now under scrutiny.
The critique comes against the backdrop of the Nigerian National Petroleum Company Limited’s (NNPCL) explanation regarding a $3.3 billion loan secured through the Central Bank of Nigeria (CBN) to bolster Naira in the foreign exchange market.
During a session with the Senate Committee on Finance, which includes both Adedeji and NNPCL’s Chief Financial Officer, Umoru Ajiya, the operations of the tax credit scheme were examined.
This inquiry, led by Senator Sani Musa (APC, Niger East), sought clarity on the scheme’s efficacy in addressing the country’s deteriorating federal road infrastructure.
According to Ajiya, the NNPCL has spent about N664 billion towards refurbishing roads across Nigeria’s six geo-political zones.
Also, the NNPCL has acknowledged the $3.3 billion loan facility’s role in supporting CBN’s efforts to mitigate foreign exchange market volatility, with a portion of the funds (about $2.2 billion) already secured and the remainder ($1.05 billion) expected before the end of the month.
However, Adedeji argues that the tax credit scheme is “unlawful” and advocates for its termination, stressing that the FIRS should strictly involve tax collection and remittance rather than funding road projects through executive orders.
Adedeji further criticised the operational framework of the tax credit scheme, suggesting that road contract awards and payments should squarely fall within the purview of the Ministry of Works. He highlighted an upcoming meeting between FIRS, CBN, and the Ministry of Works to reassess the scheme’s progress and redirect efforts more appropriately.
Adedeji said:
Senator Musa echoed Adedeji’s concerns, indicating that the utilization of tax credits for road improvements by NNPCL and FIRS might contradict the 1999 constitution’s stipulations regarding the consolidated revenue fund. The outcome of the forthcoming meeting among the three agencies is eagerly awaited, as it could shape future policies and correct past oversights.
He said:
