From February to December 2024 the Nigerian National Petroleum Company Limited (NNPCL) received $577.6 million in tax revenue benefits through the Road Infrastructure Tax Credit Scheme from the Federal Government of Nigeria.
The Federation Account Allocation Committee (FAAC) Post-Mortem Report for February 2025 revealed that $52.5 million deductions were made each month from Federal Inland Revenue Service (FIRS) Joint Venture Gas Company Income Tax which resulted in the total amount accumulated by December.
Through Executive Order 007 of 2019 the government established the Road Infrastructure Tax Credit Scheme which permits private entities to fund road construction in exchange for tax benefits to decrease public spending on infrastructure.
NPCL and the Federal Ministry of Finance continue talks about executing the final implementation steps despite FAAC members expressing worries about the deductions. Members of FAAC recommended at their August 2024 meeting to halt the tax credit scheme because they believe government institutions must handle all road construction duties.
Faithful and Accomplished Expenditure Committee members at Bauchi joined forces to stop NNPCL from making additional deductions until the matter reaches a resolution and sub-national entities want financial reimbursement based on the current Revenue Allocation Sharing Formula. The Revenue Mobilisation Allocation and Fiscal Commission requires information from FIRS regarding the tax credits granted within the scheme framework.
Previous use of tax credits funded big road developments that resulted in finishing the Apapa-Oshodi-Oworonshoki-Ojota expressway. The government sanctioned N1.535 trillion for NNPCL tax credit scheme Phase 2 after the company declared an infrastructure development plan worth N1.9 trillion for 2023.
Nigerian economic pressures create doubts about the economic consequences that result from forfeited tax revenues despite the scheme's funding role for road construction.
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