The Senate Committee on Finance has backed the N2.7 trillion tax credit scheme required for road construction by the Ministry of Works.
The scheme, which was introduced through Executive Order 007 under former President Muhammadu Buhari’s administration, was designed to empower private companies to finance the construction or refurbishment of federal roads and recoup their investments through the deduction of the approved total costs expended on the project from their annual Companies Income Tax.
The Federal Inland Revenue Service (FIRS) had kicked against a N2.7 trillion request by the Ministry of Works through the Nigerian National Petroleum Company Limited (NNPCL) for funding road projects under the tax credit scheme.
Senator Sani Musa (APC, Niger), the committee chairman, had also criticised the scheme, saying the fund NNPCL was spending on road construction under the tax credit was supposed to be remitted into the consolidated revenue fund of the federal government.
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Musa, however, made a U-turn after listening to the submission of the Minister of Works, David Umahi, who appeared before the Senate committee on Thursday.
Umahi countered FIRS and said the tax credit scheme has helped the country to get some critical roads across the country rehabilitated or reconstructed.
He said the N2.7 trillion was not a fresh request but a funding gap incurred as of January this year.
