The Nigerian National Petroleum Company Limited deducted $525.09 million from its remittances to the Federal Inland Revenue Service in 2024 under the Road Infrastructure Tax Credit Scheme, a new report has revealed.
According to the PUNCH, it was discussed at a Federation Account Allocation Committee Post-Mortem Sub-Committee meeting in January 2025.
According to the findings, NNPCL made monthly deductions of $52.51 million from February to November 2024 from the amount due to FIRS for Joint Venture Gas and Company Income Tax. These funds were set aside for the RITCS, which allows private companies to invest in road construction and receive tax credits in return.
The report stated, “So far, as of November 2024, the sum of $52,509,484.28 was deducted, bringing the total amount to $525,094,842.80.”
However, state representatives at the meeting expressed concerns about these deductions, insisting that road construction is the responsibility of the Federal Government.
In August 2024, FAAC members requested a suspension of the deductions, arguing that the national oil firm should not continue making them without proper consultation. A similar request was made during the FAAC Plenary meeting in Bauchi, where NNPCL was asked to halt further deductions until the issue was resolved.
“The share of the sub-nationals should be calculated based on the Revenue Allocation Sharing Formula and refunded,” the report noted.
To address these concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission formally asked FIRS to provide full details of the tax credits given to NNPCL and other companies participating in the scheme.
The Road Infrastructure Tax Credit Scheme allows companies with large tax liabilities to fund road projects instead of paying taxes directly.
One of the key projects completed under this scheme was the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota expressway.
In 2023, the government approved N1.535 trillion for the second phase of the scheme. NNPCL also announced plans to spend N1.9 trillion on infrastructure projects under the programme.
While the scheme aims to improve road infrastructure, concerns remain about its impact on revenue allocation among states. The FAAC Sub-Committee is currently awaiting FIRS’s response on the tax credits granted to NNPCL and other firms.
