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Nigeria should include tax credit for road constructions as part of revenue profile ~Adedipe

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By Oludare Mayowa

An economist, Abiodun Adedipe has revealed that Nigeria is under reporting its revenue by excluding the tax swap for some corporate entities to build roads and other infrastructure across the country.

Adedipe, who spoke at the First Bank webinar on Economic Outlook on Friday said as long as the tax obligations by the companies involved in the swap is part incomes that ought to accrue to the country, it should be captured in the revenue of the government.

Nigeria has continued to deploy tax credit to encourage corporate organisation to help in rebuilding some of Nigerian dilapidated road network across the country.

Under the scheme, companies such as Dangote Group, the Nigerian National Petroleum Company (NNPC) Limited and MTN Nigeria Plc are granted tax holiday for a certain period of time to enable them to deploy such funds to finance specific roads in some part of the country.

However, Adedipe said the government ought to have captured such uncollected tax credit in its revenue profile.

READ ALSO: Nigeria declines to sign global tax deal, says it’s skewed against the country

“The tax swap deployed by MTN, NNPC, Dangote and others are used to build infrastructure and should be included in the revenue income of the government to reflect proper revenue collection,” Adedipe told his audience.

In 2021, Nigeria issued tax credit to the tune of N147.8 billion to some private investors including MTN Nigeria, Dangote Group, Globalcom and the NNPC.

On January 25, 2019, President Muhammadu Buhari signed the Executive order 007, which established the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme 2019. The scheme seeks to encourage public-private partnership interventions.

The scheme is a ten-year scheme that enables the federal government to leverage on private sector funding for the construction of Refurbishment of eligible road infrastructure projects in the country.

Tax credit scheme is a way of paying tax by the corporations. It means instead of remitting their company income tax to the federation account through the Federal Inland Revenue Service (FIRS), the companies undertake to invest such money to build specific road project on behalf of the government that covers the amount they ought to have paid.

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