NNPCL Deducts $525M for Road Tax Credit, Raising Concerns

NNPCL’s $525M Tax Deduction for Road Projects Sparks Debate
The Nigerian National Petroleum Company Limited (NNPCL) has deducted a whopping $525.09 million from its tax remittances to the Federal Inland Revenue Service (FIRS) under the Road Infrastructure Tax Credit Scheme (RITCS).

A report from the Federation Account Allocation Committee (FAAC) Post-Mortem Sub-Committee, seen by Sunday PUNCH, revealed that NNPCL made monthly deductions of $52.51 million from February to November 2024 to fund road infrastructure projects.

What’s the Road Infrastructure Tax Credit Scheme?

The RITCS allows private companies to fund critical road projects and offset their tax liabilities in return.

It was initially launched to improve Nigeria’s road network without relying solely on government funding.

Why Are State Officials Concerned?

Despite the intended benefits, state representatives at the FAAC meeting have raised concerns over NNPCL’s continued deductions.

At a plenary meeting in Bauchi, the FAAC committee urged NNPCL to suspend further deductions, arguing that road construction is primarily the Federal Government’s responsibility.

The states also demanded that their share of the deductions be refunded based on the existing Revenue Allocation Sharing Formula.

To address these concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission has requested detailed records from FIRS regarding the tax credits granted to NNPCL and other companies participating in the scheme.

The Bigger Picture: Nigeria’s Infrastructure Financing

• The NNPCL tax credit scheme was used to fund the 32-kilometer Apapa-Oshodi-Oworonshoki-Ojota expressway.
• In 2023, the Federal Government approved N1.535 trillion under Phase 2 of the scheme.
• NNPCL previously announced plans to spend N1.9 trillion on infrastructure development through tax credits.

What Happens Next?

With the controversy surrounding these deductions, all eyes are now on FIRS and NNPCL to provide clarity.

Will the deductions continue, or will state representatives succeed in getting refunds? The debate over who should fund Nigeria’s roads is far from over.