NNPC Tax credit: FEC approves N1.5 trillion infrastructure funding

Key highlights:

• Phase 2 to cover 11 federal roads totaling 737.242km.
• The second phase is to cost N1.5 trillion under the NNPC tax credit scheme.
• Road Infrastructure Tax Credit Scheme enables companies with high tax profiles to construct roads in a negotiated agreement with the federal government

The Nigerian Government approved the sum of N1.535 trillion under Phase 2 of the NNPC limited tax credit scheme.

This was disclosed in the FEC brief of the Nigerian Government on Thursday.

Nigerian National Petroleum Company (NNPC) Limited announced earlier this year that invest the sum of N1.9 trillion in the second phase of the tax credit scheme for infrastructure development.

Tax Credit

Following a recap of the FEC meeting, FG announced that phase 2 would cover 11 federal roads, they said:

• “The Federal Executive Council yesterday approved the construction and rehabilitation of 11 Federal Roads, totalling 737.242km in the sum of N1.535trillion under Phase 2 of the NNPC limited tax credit scheme.

They added the FEC also approved the award of a contract for – the purchase of 13 ambulances with in-built emergency medical facilities for selected Federal Unity Colleges; – the construction & furnishing of the Senate Building (4 suspended floors) for the Federal University of Health Sciences, Ila-Orangun.

Backstory

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.

Second Phase

Kyari, NNPC CEO noted during phase 1 of the scheme rolls, the NNPC is committed to investing N1.9 trillion for the second phase, he said:

• “Clearly as you recall we have done phase 1 and funding has been steady, we are now committed to a second phase of N1.9 trillion and we are also committed to setting aside funds to fund the contractors including any necessary mobilization that could be required.
• “What is important for us is that our consultants will have to validate the value for money and the quality of work that you’ve done on these roads.”

Good quality

He added that NNPC wants to maintain good quality standards of roads under the second phase.

• “I think that our road users alluded to the fact that they have seen extensive quality work being done on the roads that have been assigned during phase 1.
• “We want the same quality to be maintained because of the execution of the roads under phase 2, and speaking of execution is very important because the funds are available and therefore there should be no excuse.”