FG Discontinues Tax Credit Utilisation by Companies for Roads Development

Bennett Oghifo

The federal government has discontinued the use of tax credit by companies for road development, because this system does not follow constitutional tax administration.

It was know as Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (Executive Order 007).

The Executive Chairman of Nigeria’s newly formed Nigeria Revenue Service (NRS), Mr. Zacch Adedeji, gave the information about why it was discontinued when he addressed a joint sitting of the editorial boards of THISDAY and Arise News last Wednesday.

Adedeji said, “No matter how good a programme is, the first thing that it must have are good products. The remits of the Nigeria Revenue Service, as it were then or the Federal Inland Revenue Service is to access, to collect and to account “ for taxes. “Appropriation is not part of the remits of the Nigeria Revenue Service or Federal Inland Revenue Service. So when you give tax credits for roads it is an appropriation act, because you spent the money, but your remit is to collect and give it to the constitutional body that will sign that money. Which is the Federation Account Allocation Committee (FAAC).

“And who says that that money is yours? Who says it belongs to your family? Who says it’s not students that will come and work in your factory and want to use it to pay their school fees.”

Another point he raised was that FIRS/NRS lacks the competence to know how a road is constructed, saying, “We lack competence, as Nigerian Revenue Service, because we don’t know how the road is done and that is why we stopped the use of tax credit. Whatever their taxes, let government choose the proper appropriation.”

Many major companies in Nigeria have utilised the Federal Government’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (Executive Order 007)to finance the construction and rehabilitation of federal roads in exchange for tax credits. 

As of 2024–2025, the following companies are key participants in the scheme:

• Nigerian National Petroleum Company Limited (NNPCL): As at late 2024, NNPC was one of the largest contributors, financing over 21 road projects covering over 1,800 kilometers. Projects included the Ilorin-Jebba-Mokwa/Bokani Junction Road and the Lagos-Badagry Expressway.
• Dangote Group (Dangote Cement Plc): A prominent participant, having worked on the Apapa-Oshodi-Oworonsoki-Ojota Expressway and the Obajana-Kabba road in Kogi State.
• BUA Group (BUA International Limited): Involved in the construction of major roads, including the Bode-Saadu-Lafiagi road, Eyinkorin road and bridge, and the Okura Road, aiming to complete over 500km of roads by 2026.
• MTN Nigeria Communications Plc: Engaged in the rehabilitation and reconstruction of the Enugu-Onitsha expressway.
• Nigeria LNG Limited (NLNG): Provided funding for the Bodo-Bonny road and bridge project in Rivers State.
• Access Bank Plc: Involved in fixing the Oniru axis of the VI-Lekki circulation road in Lagos State.
• Mainstream Energy Solutions Limited: Undertaking the construction of the Malando-Garin Baka-Ngwaski road and rehabilitation of the Mokwa-Nasarawa road in Niger State.
• Transcorp Group: Participating in the construction of the Oyinbo-Izuoma-Mirinwayi-Oklama-Afam Road.
• GZI Industries: Re-constructing the Umueme village road in Abia State.
• Others: Historical or initial participants included Lafarge Africa Plc, Unilever Nigeria Plc, and Flour Mills of Nigeria Plc. 

Key Details About the Scheme:

• Mechanism: Companies use their funds to build roads and then offset the costs against their future Company Income Tax (CIT) liabilities.
• Scope: The scheme, which began around 2019, aims to run for 10 years.
• Recent Developments: In 2025, it was reported that NNPC was pausing further direct funding through the scheme to focus on core business, while other private sector companies continued their projects.