The federal government has ended the system where big companies use their tax money to build roads instead of paying it into the government’s account.

From now on, the government insists that all road projects must be handled through the normal budget process approved by the National Assembly.

The Executive Chairman of the Nigeria Revenue Service (NRS), Mr. Zacch Adedeji, made this known on Wednesday. He explained that this change is necessary to follow the Nigerian Constitution and financial laws.

Under the old system, known as the Road Infrastructure Tax Credit Scheme, major companies like Dangote, BUA, and MTN were allowed to fix federal roads and then subtract the cost from the taxes they owed the government.

Mr. Adedeji said that even though the plan was meant to help the country, it was causing a problem with how the law works. He stated that the job of the tax office is to collect money, not to decide how that money is spent on construction.

“No matter how good a programme is, the first thing that it must have is good products. The remits of the Nigeria Revenue Service are to assess, to collect, and to account for taxes. Appropriation is not part of the remits of the Nigeria Revenue Service,” Adedeji said.

He further explained that when a company is given a tax credit to build a road, it is like the government is spending money without following the proper rules. He said the tax office must collect the money first and give it to the Federation Account Allocation Committee (FAAC), which is the body mandated by law to share and handle public funds.

“When you give tax credits for roads, it is an appropriation act, because you spent the money, but your remit is to collect and give it to the constitutional body that will sign that money,” he added.

Apart from the law, the NRS boss said his agency does not have the engineers or the technical skills to check if a road built by a company is actually worth the amount of tax they are claiming. He said while companies are still welcome to fund roads, the government must be the one to approve how public money is used.

This decision comes after a big gap was created when the NNPC stopped funding roads through this scheme in 2025, leaving about N3 trillion worth of projects without money. Before now, NNPC had paid for over 21 roads, including the Lagos-Badagry Expressway. Because of this, the Minister of Works, David Umahi, said the government is now looking for new partnerships with private investors to finish these roads.

Many big projects are affected by this shift. For years, Dangote Group used tax credits for the road leading to the Lekki Deep Seaport, while BUA Group worked on the Bode-Saadu-Lafiagi Road. Other companies like MTN worked on the Enugu-Onitsha Expressway, and NLNG funded the Bodo-Bonny Bridge in Rivers State.

The government believes that by going back to the central budget system, it can make sure all spending is transparent and follows the law. This ensures that every kobo collected as tax is properly accounted for before it is spent on infrastructure. (The Nation)

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