FG Dumps Road Tax Credit Scheme, Says Projects Must Follow Appropriation Process
The Federal Government has discontinued the use of corporate tax credits as a means of funding road construction, insisting that all such infrastructure projects must henceforth be executed strictly through the constitutionally approved appropriation process.
The disclosure was made by Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), during a joint session with the editorial boards of ThisDay and ARISE News.
Adedeji said the decision marks a clear departure from the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, under which major private sector firms were allowed to finance federal road projects and recover their investments through tax credits.
According to him, while the scheme was designed to accelerate road development and reduce funding pressure on government, it raised concerns around constitutional compliance, transparency, and fiscal oversight.
“We cannot bypass the appropriation powers of the National Assembly,” Adedeji said.
“As a revenue agency, our mandate does not extend to funding infrastructure outside what has been duly appropriated.”
He stressed that under Nigeria’s constitutional framework and public finance regulations, all federal infrastructure spending must be authorised by the legislature, adding that revenue agencies are bound to operate within clearly defined limits.
The NRS boss explained that although the tax credit initiative was well-intentioned, it conflicted with the statutory role of the agency, particularly in situations where project selection, execution, and repayment were not directly tied to budgetary approval.
Going forward, Adedeji said road construction and rehabilitation will be funded through centrally budgeted allocations, ensuring proper legislative scrutiny, clearer accounting, and stronger oversight mechanisms.
The Road Infrastructure Tax Credit Scheme, introduced under previous administrations, enabled companies particularly in the oil, cement, and manufacturing sectors to construct or rehabilitate federal roads considered critical to their operations in exchange for tax relief.
While the programme helped fast-track some major highway projects, critics had raised concerns about uneven project distribution, valuation disputes, and weak parliamentary oversight.
Adedeji’s remarks suggest the Federal Government is seeking to strengthen fiscal discipline and restore full legislative control over infrastructure financing, as part of broader public finance reforms.
However, analysts note that the policy shift could slow the pace of road development in the short term unless capital allocations for infrastructure are significantly increased in annual budgets.
As of press time, the Ministry of Works and the National Assembly had not issued further clarifications on how ongoing tax-credit-funded road projects would be treated under the new policy framework.
