Adedeji says revenue agency lacks engineering capacity to validate projects, insists scheme falls outside its statutory mandate….
The Nigeria Revenue Service (NRS) has discontinued the road infrastructure tax credit scheme, citing legal limitations and its inability to verify construction work carried out under the programme.
Chairman of the NRS, Zacch Adedeji, disclosed this during a media roundtable with ThisDay and Arise News, stating that although the scheme may appear beneficial, it does not fall within the statutory responsibilities of the revenue agency.
According to him, the core mandate of the Nigeria Revenue Service is limited to assessing, collecting and accounting for government revenue, not overseeing infrastructure spending.
“No matter how attractive a programme may be, it must be grounded in law. The responsibility of the Nigeria Revenue Service, formerly the Federal Inland Revenue Service, is to assess, collect and account for revenue. Appropriation is not part of our mandate,” Adedeji said.
He explained that granting tax credits for road construction effectively amounts to an appropriation function, which constitutionally belongs to institutions authorised to allocate and spend public funds.
Adedeji revealed that one of the first files he received upon assuming office involved approvals under the road tax credit scheme. While he approved the initial request, he declined subsequent ones after recognising the challenges involved in verifying completed road projects.
“I was pressured to approve the first request, and I did. But when the next came, I declined. This is like signing your way into trouble. A file came for a 10-kilometre road project. How do I verify it? Do we have engineers in the Nigeria Revenue Service to confirm that the work has been properly executed?” he said.
He noted that although the agency has staff across the country, they are tax administrators, not construction professionals, and therefore lack the technical capacity to validate infrastructure claims.
“The fact that a project is labelled a tax credit does not make it a tax responsibility. Without the capacity to confirm whether the work has been done, we cannot continue. Such matters should be handled by the Ministry of Works,” he added.
Adedeji had earlier raised concerns about the legality of the N2.59 trillion tax credit scheme introduced under former President Muhammadu Buhari’s administration to support road construction nationwide. He maintained that neither the revenue service nor the Nigerian National Petroleum Company should be directly involved in paying contractors.
The road infrastructure tax credit scheme, approved in October 2017, was designed to encourage private sector participation in road development by granting income tax credits to companies and individuals that finance the construction, rehabilitation or refurbishment of public roads.
However, the NRS now says continuing the programme under its supervision poses legal and operational risks, prompting its decision to withdraw from the scheme.
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