The Nigeria Revenue Service (NRS) has discontinued the road infrastructure tax credit scheme, saying the agency lacks the capacity to verify construction projects executed under the programme.
Zacch Adedeji, chairman of the NRS, spoke during a media roundtable with ThisDay and Arise News.
Adedeji said while the tax credit scheme may appear good, it falls outside the statutory remit of the revenue service, which is limited to assessing, collecting, and accounting for government revenue.
“No matter how good a programme is, the first thing is that it must have roots in law. The remit of Nigeria Revenue Service, or as it were then, Federal Inland Revenue, is to assess, to collect and to account,” the NRS chairman said.
“Appropriation is not part of the remit of Nigeria Revenue Service or Federal Land Revenue Service.”
He said granting tax credits for road construction effectively amounts to an appropriation function, which constitutionally belongs to government bodies empowered to spend and allocate public funds.
Adedeji explained that one of the first files handed to him upon assumption of office involved road tax credits.
While he approved an initial request, the chairman said he declined subsequent ones after realising the verification challenge.
“I was pressured to do the first one, I did it. The second one, I said no. This one is like tarring your road to prison,” Adedeji said.
“When my people asked me, I said look at how huge this file is. Iloti-Epe to Ogunnaike Road, 10 kilometres. Is this what I should sign? How will I confirm? What capacity within Nigeria Revenue Service will confirm that the road has been done?
“It’s true I have people there, but they are tax controller, they are not engineer. So, this one has to go back to ministry of works.”
‘CALLING IT TAX DOESN’T MAKE IT REVENUE AGENCY’S JOB’
According to the chairman, labelling a project as a ‘tax credit’ does not automatically make it the responsibility of a tax authority.
“I don’t have engineer to confirm whether the road is done. The fact that they call it tax does not make it a tax work. I said I cannot be doing this because there is no way I will have capacity to actually ascertain what I’m doing,” he added.
On February 15, 2024, Adedeji faulted the three-year-old N2.59 trillion tax credit scheme introduced by former President Muhammadu Buhari’s administration for road construction across the country.
Raising concerns about the scheme’s legality and advocating for its discontinuation, he said it is not the duty of the service and the NNPC to be paying contractors.
On October 26, 2017, Buhari approved the tax relief scheme to attract private sector involvement in the provision of road infrastructure across Nigeria.
The scheme grants income tax credits to companies and individuals that provide funding for the refurbishment and rehabilitation of roads.
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