Senate committee backs N2.7trn tax credit funding of roads

The Senate Committee on Finance on Thursday, expressed its support for the N2.7trillion Tax Credit Fund for some roads projects to be undertaken by the Federal Ministry of Works.

The chair of the committee, Senator Sani Musa, said the idea was welcoming as it would help to sleep up the completion of some ongoing major federal roads across the country.

The Nigerian National Petroleum Company Limited (NNPCL), takes the responsibility of funding the projects through the upfront payment of its tax remittances to the Federal Inland Revenue Service (FIRS).

However, the Chairman of FIRS, Mr Zacch Adedeji, had earlier in the week, opposed the scheme on the grounds that the execution didn’t comply with laid down regulatory processes.

But, the Senate committee threw its backing for the scheme on Thursday after the Minister of Works, Senator David Umahi, appeared before it to defend it.

The minister told the committee that the N2.7tn was not a fresh request but a funding gap incurred as of January 2024.

According to Umahi, over the last three years, the scheme had helped the the government to reduce funding gaps in road infrastructure.

He spoke further, “Tax Credit simply means front loading of taxes of the affected agencies involved and using it for infrastructure development.

“A very good example of it was the Apapa – Oshodi Road, reconstructed by Dangote Plc under the scheme, which not only solved the problem of congestion on the road but provided a solid road that can last 50 years life-span.

“It is the same road infrastructure solution the N2.59tn tax credits being offered through NNPCL is offering, but not well-funded yet .

“Only N650 billion has been released through two batches for funding execution of the affected roads under the scheme, making the N2.7tn funding gap very necessary.

“We need the fund for completion of roads already started under the scheme.”

The minister added that aside from the scheme, the ministry, based on provisions made in the 2024 budget , had no concrete appropriations for road construction.

He explained, “2024 budgetary provisions for the Federal Ministry of Works, which are slightly above a trillion naira, are palliatives for road construction. The reason why the National Assembly should make substantial appropriation for road infrastructure across the country .

“In doing that, at least N4.4 trillion should be appropriated for 100 kilometres road construction per each of the six geo-political zones.”