The Federal Inland Revenue Service (FIRS) has announced the issuance of tax credit certificates valued at N22.321 billion to Dangote Cement Plc.
The tax credit certificates were for the construction of Apapa-Oworonshoki-Ojota road in Lagos and the Lokoja-Obajana-Kabba road that goes through Kogi and Kwara States.
This disclosure was made by the Executive Chairman of FIRS, Muhammad Nami, who was represented by the Coordinating Director, Tax Operations Group, FIRS, Femi Oluwaniyi, at the certificates presentation event to Dangote Cement.
The tax credit certificates for the Apapa-Oworoshoki-Ojota expressway is valued at N21.6 billion while that of the Lokoja-Obajana-Kabba expressway is valued at N721 million. Dangote Cement is receiving the second tax credit certificate from FIRS for the Lokoja-Obajana-Kabba road project.
Yesterday was the second time that FIRS will be issuing a tax credit certificate to Dangote Cement for the Lokoja-Obajana-Kabba road because, in 2019, a N9.5 billion tax credit certificate was issued to Dangote Cement for the same expressway.
Dangote Cement Plc is providing funds for the reconstruction of the 2 federal roads which are sub-contracted to Hi-Tech and Julius Berger construction companies.
According to FIRS’ Executive Chairman Muhammad Nami, the gesture was to compensate the cement manufacturer with a tax payment waiver.
What the FIRS Chairman is saying
Nami said: “Government came to that reasoning that if we could encourage local investors to do the needful and of course under an agreement with some due monitoring and approvals, then some of the monies they would have accrued back to government as taxes, they would have paid.
It will be in the interest of the government that other investors, business entrepreneurs, companies take advantage of this key initiative such that Nigeria can develop faster than the government would have done alone.
We are hoping that this arrangement will be taken to another level, we are also believing that this will spur other business players out there to come and take advantage of it.”
What you should know
The issuance of tax credit certificates followed the signing of Executive Order 07 of 2019 by President Muhammadu Buhari, which is on road infrastructure tax credit.
The order encourages companies to develop infrastructure around their operational area as long as it will enhance their delivery and their businesses.
Although it is the responsibility of the government to provide public services and public facilities like roads and electricity, among others, the prevailing economic realities has made that difficult to achieve, thus the involvement of the private sector in the provision of infrastructure.