Works Minister Umahi opposes FIRS on legality of tax-funded road repairs

Minister of Works, David Umahi, has ignited a debate by publicly contradicting the Federal Inland Revenue Service (FIRS) on the legality of using tax credits for road repairs.

This development raises questions about transparency, accountability, and compliance with existing laws.

Umahi’s statement on Friday came in response to earlier concerns raised by FIRS Chairman, Zacch Adedeji, who declared the Road Infrastructure Development and Refurbishment Investment Tax Credit (Tax Credit) Scheme as illegal.

Adedeji argued that the scheme, which enables companies to offset taxes by directly funding road projects, violates existing laws prohibiting such direct use of tax funds.

However, Umahi defended the scheme, citing its success in completing crucial projects like the Apapa-Oshodi-Oworonshoki-Ojota expressway. He emphasized President Bola Tinubu’s support for the initiative, highlighting its potential to accelerate infrastructure development.

Read Also: Budget Minister, Bagudu, claims Tinubu’s policies delivering results despite resource constraints

Umahi, after a meeting with the FIRS boss on Friday, said the president approved the continuity of the scheme.

According to a statement signed by his Special Adviser on Media, Uchenna Orji, the minister said the media reports that claimed the Chairman of FIRS announced the scheme would be stopped were not correct.

Umahi further reiterated that the scheme was beneficial and that the implementation framework was encapsulated in Executive Order No. 007 of 2019 of the Federal Government of Nigeria.

“Part of their agreement was that all the NNPC projects on road infrastructure as started, should not be expanded, but should continue to the tune of N2.59trn. It was also agreed at the beginning of this Executive Order, and it was very clear that the N2.59trn was not the total cost of the project.

“Sometimes it’s about 40 per cent funding, sometimes it’s about 50 per cent funding. So, ab initio, the cost of the project up to completion was not N2.59trn. Now, we have scoped the entire project and then put a review on it, and the funding gap is NN2.7trn.

“We agreed that two of us would make a joint memo to Mr. President to suggest that the N2.7trn funding gap be channelled to the National Assembly for approval and then the method upon which we get the money,” he said.

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