NNPCL, for Road Infrastructure in 2024, deducted $525m as tax credit – Report
Nigerian National Petroleum Company Limited
NNPCL, for Road Infrastructure in 2024, deducted $525m as tax credit
The Nigerian National Petroleum Company Limited has deducted a sum of $525.09m from its remittances to the Federal Inland Revenue Service as part of the Road Infrastructure Tax Credit Scheme.
This is according to a report from a Federation Account Allocation Committee Post-Mortem Sub-Committee meeting held in January 2025 and seen by Sunday PUNCH.
According to the report, NNPCL made monthly deductions of $52.51m from the amount due to FIRS for Joint Venture Gas and Company Income Tax between February and November 2024.
These deductions were earmarked for the RITCS, a scheme designed to enable private companies to invest in critical road infrastructure and offset their tax liabilities.
The report read, “Members may recall that the Sub-Committee reported that NNPCL had made deductions in respect of the Road Infrastructure Tax Credit Scheme from the amount due to FIRS JV Gas and CIT taxes. 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, the state representatives at the meeting expressed concerns about the continued deductions by the national oil firm despite complaints from committee members.
At its August 2024 meeting, the members called for a suspension of the deductions, emphasising that the responsibility of road construction lies with the Federal Government.
Also, at the FAAC Plenary meeting held in Bauchi, NNPCL was requested to suspend further deduction pending when the contentious issue surrounding the scheme is resolved.
They argued that their share of the deduction should be calculated based on the existing Revenue Allocation Sharing Formula and refunded accordingly.
To address the concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission formally requested detailed information from the FIRS on the tax credits granted to NNPCL and other organisations involved in the scheme.
The report noted: “The Sub-National position was that it is the responsibility of the Federal Government to construct roads; hence, the share of the Sub-National should be computed based on the existing Revenue Allocation Sharing Formulae and refunded to them.
“To resolve the issue, the Chairman of the Commission wrote to the Management of FIRS requesting the detailed Tax Credit granted to NNPC Ltd and other organisations. The Sub-Committee awaits FIRS’s response.”
The Road Infrastructure Tax Credit Scheme enables companies with high tax profiles to construct roads in a negotiated agreement with the Federal Government to provide the infrastructure instead of taxes.
The scheme was used as pilot funding for the completion of the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota expressway.
In 2023, the government approved N1.535tn under Phase 2 of the NNPCL tax credit scheme.
This was after the national oil company announced that it would spend N1.9tn in the second phase of the tax credit scheme for infrastructure development.
