The Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacheus Adedeji has demanded the stoppage of the three-year-old N2.59trn tax credit scheme introduced by former President Muhammadu Buhari’s administration for road construction across the country.
Adedeji expressed his displeasure about the scheme when he appeared before the senate committee on finance.
He was invited to analyse the efficacy of the road infrastructure task credit scheme (RITC) in light of the widespread disrepair of federal roads.
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The Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, also referred to as the Road Infrastructure Tax Credit Scheme is a public-private partnership scheme signed by President Muhammadu Buhari under Executive Order 007, in January 2019, that enables the Federal Government of Nigeria to leverage private sector capital and efficiency for construction, refurbishment and maintenance of critical road infrastructure in the country.
Under the scheme, participants are entitled to tax credits against their future Companies Income Tax to the tune of the project cost incurred in the construction or refurbishment of eligible roads.
The NNPC Ltd, MTN, Transcorp Group, Access Bank, GZI industries, among others are some of the entities currently participating in the Road Infrastructure Tax Credit Scheme of Executive Order 007.
Under the scheme, participants are entitled to utilise the total cost (project cost) incurred in constructing or refurbishing an eligible road as a tax credit against their future companies income tax (CIT) liability until full cost recovery is achieved.
But at the meeting. Adedeji disagreed, raising concerns about the scheme’s legality and advocating for its discontinuation.
He said, “The mandate of FIRS lumped with the execution of Tax Credit Scheme for road construction, is to access, collect tax and remit it into the federation account and not to appropriate it for any purpose through executive order.
“It is not the duty of FIRS and NNPCL to be paying contractors. The Ministry of Works should be in line with its core mandate, allowing to award road contracts and pay for them.
“The scheme, to some people, serves as faster way for road reconstruction or rehabilitation across the country, but we should stop increasing speed towards the wrong direction.
“As a way of stopping the wrong approach, FIRS and CBN are holding a meeting with the Ministry of Works on Friday this week, where stock would be taken of what we have done through the scheme and thereafter, to the right path.
“We should, in a nutshell, not continue in the wrong trajectory.”