Senate, FIRS fault N2.59trillion Tax Credit Scheme on road construction
…as FIRS chairman says FG should not progress in error, scheme hinders NNPCL optimal performance
…NNPCL clears air on $3.3billion loan secured for CBN
By Tunde Opalana
The Tax Credit Scheme on road construction introduced by the immediate past administration of former President Muhammad Buhari through an Executive Order 7 in 2021 and continued by the Bola Tinubu administration has been faulted by the Senate and chairman of the Federal Inland Revenue Service, Mr. Zacheus Adedeji.
Both punctured the financial commitment of N2.59 trillion by the Nigerian National Petroleum Company Limited ( NNPCL) into the three year old Tax Credit Scheme introduced by the Buhari administration for road construction across the country.
The scheme came under sledged hammer on Wednesday during an interactive session organiser by the Senate Committee on Finance under the chairmanship of Senator Sani Musa ( APC Niger) and management of the NNPCL led by it’s Chief Finanancial Officer, Umoru Ajiya and the chairman of the FIRS, Zacheus Adedeji.
READ ALSO: Lottery Management: Lanre Gbajabiamila places Nigeria…
The Senator Sani Musa led Committee had invited the duo , to shed light on implementation of the scheme vis – a vis , the poor state of Federal Roads across the country.
Though both agreed that the financial burden on NNPCL, a government owned enterprise to assist the federal government hinders the optimal performance of the national oil giant, the FIRS chairman warned the federal government not to progress in error but cut short the scheme after the expiration of its five years tenure.
While the NNPCL Chief Financial Officer , raised the hope of the committee members that the scheme is helping for re- fixing of dilapidated roads across the six geo political zones in the country with N664billion spent so far , the FIRS boss , 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 , allow to award road contracts and pay for them.
” The scheme to so people serves as faster way for road reconstruction or rehabilitation across the country , but we should stop increasing speed toeards wrong direction .
” As a way of stopping the wrong approach, FIRS and CBN are holding meeting with the Ministry of Works Friday this week, where stock would be taken of what have done done through the scheme and thereafter , toe the right path .
” We should in a nutshell, not continue in the wrong trajectory “, he said .
Impressed by his submission, the Chairnan of the Committee , Senator Sani Musa , said relevant provisions of the 1999 constitution( as amended ) , are against the scheme , because monies NNPC and FIRS are being made to spend on the roads through tax credit , 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.
Further criticizing the scheme, Zach Adedeji identified as lapses in the Tax Credit scheme to include those of project monitoring, budgetary allocations , and releases of funds.
He challenged the Federal Ministry of Works to be alive to it’s responsibilities while saying he will tutor officials of the ministry on principles of financial management during their next interface.
Adedeji said the Tax Credit Scheme is hindering the performance of the NNPCL and said “we should not continue to progress in wrong trajectory”.
Senator Musa commended the FIRS chairman for his candid opinion . He said it is obvious that the scheme is not part of corporate social responsibility of the oil giant.
The chairman said the Committee will be waiting for the outcome of the meeting among the NNPCL, FIRS and the Works ministry on Friday.
“We want to see the outcome of the meeting and we will invite you next week”, said Musa.
The National Petroleum Company Limited ( NNPCL) , also cleared air on $3.3billion loan facility secured for the Central Bank of Nigeria ( CBN) for stabilization of Naira in the foreign exchange market.
On the $3.3billion loan facility , NNPCL informed the Committee members that it was secured to support CBN to suppress FOREX Volatility .
It said $2.2billion had already been secured for the apex bank while the balance of $1.05billion , would be credited the apex bank before the end of the month .
