The Federal Government has waived $577.6 million in tax revenue under the Road Infrastructure Tax Credit Scheme, benefiting the Nigerian National Petroleum Company Limited (NNPCL) for the period from February to December 2024.
According to the FAAC Post-Mortem Report for February 2025, obtained by Sunday PUNCH, a monthly deduction of $52.5 million was made from the FIRS JV Gas Company Income Tax, accumulating to a total of $577,604,432.08 by December 2024. The deductions continued consistently throughout the year, rising from $52.5 million in February to $577.6 million by December, with interim figures of $105 million in March, $262.5 million in June, and $420 million in September.
Introduced through Executive Order 007 of 2019, the Road Infrastructure Tax Credit Scheme allows private companies to fund road projects in exchange for tax credits, thereby alleviating the government’s financial burden for such infrastructure projects.
An NNPCL representative at the FAAC meeting confirmed that discussions with the Federal Ministry of Finance were ongoing to finalize the scheme’s implementation. The representative added that talks with senior government officials are aimed at ensuring the scheme operates smoothly.
The report further highlighted, “As of December 2024, a total of $52,509,484.28 was deducted, bringing the total amount to $577,604,432.08.”
While the tax credit programme has been instrumental in funding major road projects without immediate government expenditure, there are concerns about the long-term impact of these tax revenue forfeitures, particularly as the country faces economic challenges.
At the FAAC meeting in August 2024, members expressed concerns and called for the suspension of these deductions, asserting that road construction is primarily the responsibility of the Federal Government. In a subsequent plenary meeting in Bauchi, FAAC members requested that NNPCL halt further deductions until the issues surrounding the scheme are addressed. They also emphasized that their share of the deductions should be calculated according to the current Revenue Allocation Sharing Formula and refunded.
In response to these concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission formally requested detailed information from the Federal Inland Revenue Service (FIRS) about the tax credits granted to NNPCL and other participants in the scheme.
The report noted, “The Sub-National position is that road construction is a responsibility of the Federal Government; therefore, their share of the deductions should be computed based on the existing Revenue Allocation Sharing Formula and refunded accordingly. The Chairman of the Commission has written to FIRS to request detailed information on the tax credits granted to NNPCL and other organizations. The Sub-Committee is awaiting FIRS’s response.”
The Road Infrastructure Tax Credit Scheme allows companies with significant tax liabilities to fund road construction projects as part of an agreement with the Federal Government, rather than paying taxes. This scheme was initially used to fund the completion of the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota expressway.
In 2023, the government approved N1.535 trillion for Phase 2 of the NNPCL tax credit scheme, following an announcement by the company that it would invest N1.9 trillion in infrastructure development under this phase.
