Zacheus Adedeji, chairman of the Federal Inland Revenue Service (FIRS) has faulted the three-year-old N2.59 trillion 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, along with Umar Ajiya, the chief financial officer of Nigerian National Petroleum Company Limited (NNPCL).
They were invited to analyse the efficacy of the road infrastructure task credit scheme (RITC) in light of the widespread disrepair of federal roads.
On October 26, 2017, Buhari approved the tax relief scheme to attract private sector involvement in the provision of road infrastructure across Nigeria.
The approval was the outcome of a memorandum for the setting up of a road trust fund presented by Kemi Adeosun, Nigeria’s erstwhile finance minister.
The RITC scheme grants income tax credits to companies and individuals that provide funding for the refurbishment and rehabilitation of roads.
The scheme is a public-private partnership (PPP) intervention that enables the Nigerian government to leverage private sector capital and efficiency for the construction, repair, and maintenance of critical road infrastructure in key economic areas in Nigeria.
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.
Addressing the lawmakers, Ajiya argued that the scheme has improved roads across the country, saying that N664 billion has been spent on repairs in all six geopolitical zones.
However, Adedeji disagreed, raising concerns about the scheme’s legality and advocating for its discontinuation.
