The Nigerian National Petroleum Company Limited (NNPCL) has deducted $525.09 million from its remittances to the Federal Inland Revenue Service (FIRS) under the Road Infrastructure Tax Credit Scheme (RITCS). The deductions, made between February and November 2024, were earmarked for road projects, allowing companies to offset tax liabilities by investing in critical infrastructure.
However, concerns have been raised by state representatives at the Federation Account Allocation Committee (FAAC) meetings. They argue that road construction is a federal responsibility and that the deductions should be redistributed based on the existing revenue-sharing formula.
At the August 2024 FAAC meeting, members called for a suspension of the deductions, emphasizing that NNPCL should halt further withdrawals until the issue is resolved. Similarly, during the FAAC plenary in Bauchi, NNPCL was urged to suspend the deductions pending further discussions.
To address these concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission formally requested detailed information from FIRS on the tax credits granted to NNPCL and other companies under the scheme. The committee is awaiting a response from FIRS to determine the next steps.
The RITCS was introduced to enable private companies with high tax obligations to construct roads instead of paying taxes. This initiative has funded key projects, including the Apapa-Oshodi-Oworonshoki-Ojota Expressway. In 2023, the federal government approved N1.535 trillion for the second phase of NNPCL’s tax credit scheme, as the company announced plans to spend N1.9 trillion on infrastructure development.
Despite the program’s benefits, the continued deductions by NNPCL remain a contentious issue, with stakeholders demanding transparency and proper revenue distribution.
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