The Chairman, Federal Inland Revenue Service ( FIRS) , Mr Zacheus Adedeji has expressed reservation over the three years old N2.59trillion Tax Credit Scheme introduced by former President Muhammadu Buhari administration for road construction across Nigeria.
Adedeji made the reservation at an interactive session in. Abuja.
The meeting was at the instance of the Senate Committee on Finance, with FIRS management and the NNPLC Management.
BRANDPOWER reports that the N2.59trillion Tax Credit Scheme was introduced via Executive Order 7 of 2021 by Muhammadu Buhari led administration.
The Committee led by the Chairman,Sen. Sani Musa had invited the management of FIRS and the NNPLC to brief the committee on implementation of the scheme in relation to the poor state of federal roads across the country.
Adedej said the scheme was unlawful and should be discontinued . “The mandate of FIRS lumped with 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 and allowed to award road contracts and pay for them.
“As a way of stopping the wrong approach, FIRS and CBN are holding meeting with the Ministry of Works on Friday Feb 17, where stock would be taken of what have done through the scheme and thereafter , toe the right path .
“We should in a nutshell, not continue in the wrong trajectory “, he said .
The NNPLC Chief Financial Officer, Mr Umoru Ajiya clearified on the 3.3billion dollars loan facility secured for the Central Bank of Nigeria (CBN) for stabilisation of naira in the foreign exchange market.
He said that it was secured to support CBN to suppress forex volatility .
Ajiya however,told the committee members that the tax credit scheme was helping to fix the dilapidated roads across the six geo-political zones in the country with N664billion spent so far.
He said 2.2billion dollars had already been secured for the apex bank while the balance of1.05billion dollars would be credited to the apex bank before the end of the month .
Chairman of the Committee,Sen. Sani Musa said relevant provisions of the 1999 constitution( as amended )was against the scheme , because the fund that NNPCL and FIRS were being made to spend on the roads through tax credit was supposed to be remitted into consolidated revenue fund .
“We are waiting for outcome of meeting of the three agencies involved in the scheme , before deciding on how to help the present government to correct mistakes of the past,” he said.
BRANDPOWER reports that the Road Infrastructure Tax Credit which can be claimed in any year of assessment is limited to fifty percent (50 per cent) of the annual CIT liability.
There is however no limit to the tax credit which can be claimed in respect of an Eligible Road in an ‘Economically Disadvantaged Area.
