FIRS, CBN, Ministry of Work Begin Review of N2.59 Trillion Tax Credit Scheme

FIRS, CBN, and the Ministry of Work will Friday begin the review of the N2.59 Trillion Tax Credit Scheme.

 

NewsOnline Nigeria reports that the Federal Inland Revenue Service (FIRS) plans to meet with the Central Bank of Nigeria (CBN) and Ministry of Works this Friday to review about N2.59 trillion tax credit scheme meant for road repairs and construction in the country. 

 

This Nigeria news platform understands that Zacheus Adedeji, the Chairman of the FIRS, also expressed strong disapproval of the N2.59 trillion tax credit scheme initiated under the administration of former President Muhammadu Buhari. This scheme, aimed at facilitating road construction across Nigeria, is now under scrutiny. 

 

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The critique, NewsOnline Nigeria gathered, comes against the backdrop of the Nigerian National Petroleum Company Limited’s (NNPCL) explanation regarding a $3.3 billion loan secured through the Central Bank of Nigeria (CBN) to bolster Naira in the foreign exchange market. 

 

During a session with the Senate Committee on Finance, which includes both Adedeji and NNPCL’s Chief Financial Officer, Umoru Ajiya, the operations of the tax credit scheme were examined.

 

This inquiry, led by Senator Sani Musa (APC, Niger East), sought clarity on the scheme’s efficacy in addressing the country’s deteriorating federal road infrastructure. 

 

According to Ajiya, the NNPCL has spent about N664 billion towards refurbishing roads across Nigeria’s six geo-political zones.  

 

Also, the NNPCL has acknowledged the $3.3 billion loan facility’s role in supporting CBN’s efforts to mitigate foreign exchange market volatility, with a portion of the funds (about $2.2 billion) already secured and the remainder ($1.05 billion) expected before the end of the month. 

 

However, Adedeji argues that the tax credit scheme is “unlawful” and advocates for its termination, stressing that the FIRS should strictly involve tax collection and remittance rather than funding road projects through executive orders. 

 

Adedeji further criticised the operational framework of the tax credit scheme, suggesting that road contract awards and payments should squarely fall within the purview of the Ministry of Works. He highlighted an upcoming meeting between FIRS, CBN, and the Ministry of Works to reassess the scheme’s progress and redirect efforts more appropriately. 

 

Adedeji said: “The Mandate of FIRS lumped with the execution of Tax Credit Scheme for road construction is to access, collect tax and remit it into the federation account and not to appropriate it for any purpose through executive order. 

 

“It is not the duty of FIRS and NNPCL to be paying contractors. The Ministry of Works should be in line with its core mandate to award road contracts and pay for them.  

 

“The scheme serves as a faster way for road reconstruction or rehabilitation across the country but we should stop increasing speed towards the wrong direction. 

 

“As a way of stopping the wrong approach, FIRS and CBN are holding a meeting with the Ministry of Works on Friday this week, where stock would be taken of what has been done through the scheme and thereafter to the right path. 

 

“We should in a nutshell, not continue on the wrong trajectory.” 

 

Meanwhile, NewsOnline Nigeria reports that Senator Musa echoed Adedeji’s concerns, indicating that the utilization of tax credits for road improvements by NNPCL and FIRS might contradict the 1999 constitution’s stipulations regarding the consolidated revenue fund. The outcome of the forthcoming meeting among the three agencies is eagerly awaited, as it could shape future policies and correct past oversights. 

 

He said, “We are waiting for the outcome of the meeting of the three agencies involved in the scheme, before deciding on how to help the present government to correct mistakes of the past.