Senate dumps FIRS on Tax Credit controversy

Sharon EboesomiFebruary 23, 20243 min

Senator Sani Musa noted that a fresh implementation of the policy outside the N2.7 trillion should be halted for now.

Ministry - Senate Dumps FIRS on Tax Credit controversy

The Senate through its committee on Finance, dumped the stay-of-action position proposed to it by the Federal Inland Revenue Service (FIRS) on the N2.7 trillion Tax Credit Fund required for specific road construction by the Federal Ministry of Works. 

In an interaction with the Committee the previous week, Zacch Adedeji, the Chairman of FIRS, blasted the Ministry of Works for requesting an additional N2.7 trillion through the Nigerian National Petroleum Company Limited (NNPCL) to fund road projects under the Tax Credit Scheme.

In contrast, the Minister of Works, Senator David Umahi, claimed in a counter-argument before the Committee on Thursday that the N2.7 trillion was a funding gap that had been there since January of this year rather than a new request.

READ ALSO: FIRS boss condemns Tax Credit policy on Road Construction 

According to his explanation to the committee, the nation had benefited from the Tax Credit Scheme in the last three years by having certain important roads renovated or built nationwide.

“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  N2.59 trillion 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 N2.7 trillion funding gap very necessary. We need the fund for completion of roads already started under the scheme,” he said.

He added that aside from the scheme, the Ministry based on provisions made in the 2024 budget has no concrete appropriations for road construction.

“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 of road construction per of the six geo-political zones,” he added. 

In his remarks, the Chairman of the Committee, Senator Sani Musa (APC Niger East),  said: “Tax Credit Policy is a welcome initiative meant for exigencies being addressed and based on submissions made by the Minister, the N2.7 trillion should be released for completion of ongoing projects under the scheme.” 

Sharon Eboesomi

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