FIRS Grants N146.8bn Tax Credit To NNPC, Private Investors In 12 Months

The Federal Inland Revenue Service on Thursday said it issued certificates for the sum of N147.8bn tax credit to private investors and the Nigerian National Petroleum Corporation NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.

The FIRS said this in a report on its activities for the 2021 period.

President Muhammadu Buhari had in January 2019 signed the Executive Order with the main focus designed to improve roads infrastructure across the country.

The Executive Order known as Executive Order 7 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme is aimed at developing and delivering Public Private Partnerships with notable investors to bridge the road infrastructure gap in the transportation sector of the country.

At the signing ceremony at the presidential villa, Abuja, the President had explained that under the arrangement, 19 Eligible Road Projects are to be undertaken by six leading manufacturing and construction firms, located in 11 States, and in each of the six Geo-political Zones.

He said the development provides another opportunity to demonstrate the commitment of the administration to conceive, design, develop and deliver PPP with notable investors in order to close the road infrastructure gap in the transportation sector.

He added that there have also been revenue shortfalls that have hampered government’s efforts to fully fund critical projects

Companies such as Dangote Cement and the NNPC have taken advantage of the initiative to construct various road projects across the country.

For instance, tax credit certificates worth N22.3bn was given to Dangote Cement Plc, for the construction of Apapa-Oworonshoki-Ojota road in Lagos and the Lokoja-Obajana-Kabba road connecting Kogi and Kwara States in the country’s north central region.

The FIRS said, “The Service issued certificates for the sum of N147.8bn tax credit to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.”

Despite the global economic challenges occasioned by the Coronavirus pandemic, as well as the disruption of business activities in 2020 by nationwide protests, the FIRS said it achieved over 100 per cent of its collection target for the year 2021.

“Notwithstanding the limitations faced in 2020/2021, the Service achieved over a hundred percent of its collection target,” Executive Chairman, Muhammad Nami stated in the FIRS 2021 Performance update signed by him.

He said the FIRS, in the year 2021 collected a total of N6.4trn in both oil (N2trn) and non-oil (N4.39trn) revenues as against a target of N6.401trn.

Nami said that Companies Income Tax amounted to N1.896trn; Petroleum Profits Tax amounted was N2trn; Value Added Tax amounted to N2.07trn; Electronic Money Transfer Levy amounted to N114bn; while Earmarked Taxes amounted to N208.8bn; among others.

He said, “Non-oil sector contributed 68.64 per cent of the total collection in the year, while oil sector’s contribution was 31.36 per cent of total collection.”

The report explained that “in line with the law, 2021 income tax revenue is a function of the outcome of business activities in 2020.

“In that year, the country entered into a second economic recession within five years. The recession was occasioned by five-months of lockdown caused by the Coronavirus pandemic.

“To compound the economic challenges of COVID-19 pandemic, business activities were disrupted by the End-SARS protests.”

It further stated that the deployment of technological tools was a game-changer for the Service.

“Upon the coming into office of the current management, the FIRS began strategic administrative and operational reforms; and the implementation of new policies that would improve its capacity towards the fulfilment of its mandate.

“The deployment of a new automated tax administration system, the ‘TaxPro Max’ in June 2021 was a game-changer. With the solution, taxpayers experienced ease of registration, reporting, payment and issuance of Tax Clearance Certificates while the Service experienced greater efficiency in the deployment of resources thereby leading to improved revenue collection,” the report added.

The FIRS stated that strong opposition to its statutory mandates by certain interests posed a major setback in the full implementation of its reforms.