Dangote Cement has received the Federal Government’s tax credit valued at N22.32 billion for the construction of some road infrastructure.
The Federal Inland Revenue Service (FIRS) which issued the cement giant the tax credit certificates said they are for the construction of Apapa-Oworonshoki-Ojota road in Lagos and the Lokoja-Obajana-Kabba road spanning Kogi and Kwara states.
FIRS Executive Chairman, Muhammad Nami, represented by the Coordinating Director, Tax Operations Group, Femi Oluwaniyi, presented the two tax credit certificates to Dangote Cement in Abuja on Wednesday.
The tax credit certificates for the Apapa-Oworoshoki-Ojota expressway is valued at N21.6 billion while the tax credit certificate for the Lokoja-Obajana-Kabba expressway is valued at N721 million.
This is the second tax credit certificate the FIRS has issued to Dangote for the Lokoja-Obajana-Kabba road construction. N9.5 billion tax credit certificate had earlier been awarded to Dangote Cement Plc for same project in 2019.
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While Dangote Cement Plc is providing the funding for the projects, Julius Berger is handling the construction of the two federal roads.
The Federal Government took the action to compensate Dangote Cement, by issuing the certificates to cover for the tax that Dangote Cement would have paid.
“Government came to that reasoning that if we could encourage local investors to do the needful and of course under an agreement with some due monitoring and approvals, then some of the monies they would have accrued back to government as taxes they would have paid” Nami said.
“It will be in the interest of the government that other investors, business entrepreneurs, and companies take advantage of this key initiative such that Nigeria can develop faster than the government would have done alone,” Nami said.
“We are hoping that this arrangement will be taken to another level, we also believe that this will spur other business players out there to come and take advantage of it,” he added.
Issuance of tax credit certificates was made possible by Executive Order 07 of 2019 signed by President Muhammadu Buhari which is about road infrastructure tax credit. What that entails is that companies are encouraged to develop infrastructure around them as long as it will enhance their delivery, their business not to take over the responsibility of the government because it will ultimately impact on the immediate environment, the government is supposed to take care of.
In his response on behalf of Dangote Cement Plc, Ahmed Mansur, Group Executive Director Government and Stakeholders Relations, said, “It is true that the responsibility of providing public services and public facilities like roads and electricity and so on is that of the state but in today’s modern state it is not possible to encompass every service that the public requires even if the states have the funds.
“To do it at the same time within the time that the public requires is often not possible and I think it is this kind of thing that has generated the need for the state to engage private actors to participate in the process.
“While it remains the responsibility of the state, the ability of private sectors to also contribute their quota in terms of capacity to execute becomes a huge advantage and it is because of it that when the opportunity was offered by His Excellency Mr President through this EO 07, we jumped at the opportunity.”
