Corporate or Individual businesses operating in Nigeria can now invest in the country’s infrastructure, with a hope of getting 30% tax remission, Minister of Power, Works and Housing, Babatunde Fashola, said yesterday.
The first beneficiary of the new policy is a subsidiary of the Dangote group which received approval by the Federal Executive Council (FEC) for the construction of a section of Lokoja-Obajana-Kabba-Ilorin road, specifically the section between Obajana-Kabba road using cement.
“It is important to stress that this is not a Dangote only issue, it is an existing tax policy that corporate or individual that makes an
investment in the infrastructure of a public nature should be entitled to make claims for remission on its income tax obligation.
“Even as an individual, you are entitled to make this claim if the infrastructure goes through this type of process and is approved by the government. So it is not a Dangote issue but an economic policy that is to stimulate investment in infrastructure renewal or in any other area that government feels it needs the private sector to complement its’ efforts in such area.
“So the details is about 30 percent income tax obligation spread over time. It doesn’t mean they won’t pay tax, they will continue to pay their tax obligation but they will get remission for making this investment because ultimately the road doesn’t belong to them but to government and is for the benefits of Nigerians. So it is like credit advance to government” Fashola explained.
This, the minister said is demonstrative of how “perhaps we should continue to build going forward in order to reduce maintenance on the road and the company proposing to fund the construction of that section of the road in exchange for some tax remissions”.
Fashola said his ministry had presented a memo before the FEC seeking to take advantage of an existing policy on benefits of tax policies, for the purpose of driving infrastructural development and renewal.
The first proposal which he presented at the FEC meeting was by one of the subsidiaries of Dangote group, a construction company, for the construction of a section of Lokoja-Obajana-Kabba-Ilorin, specifically, the section between Obajana-Kabba Road using cement.
Companies are ordinarily supposed to pay income tax, he explained, adding that there are existing policies in the country’s laws which enable the government to consider and give taxes incentives.
“So Council considered and approved the proposal for the Dangote construction company to build that section of the road because the tonnage of cement being produced from the factory has increased and the traffic in that area has increased, there have been unfortunate accidents also.
So is a total economy policy which council considered and approved because it gives support to industry, it enables us to take benefit of our tax law to renew infrastructure at a time where we are really challenged for resources to finance all our routes. It also enables us to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on that road for their livelihood would also benefit from the road” Fashola said.
