Works Minister Umahi Counters FIRS Chair, Says Tinubu Hasn’t Stopped NNPC’s N2.59tn Road Tax Scheme

The Minister of Works, David Umahi, on Friday countered remarks by the Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, voicing his opposition to the controversial N2.59 trillion Road Infrastructure Tax Credit Scheme introduced by the Muhammadu Buhari administration.

Umahi spoke in his office in Abuja, after a meeting with Adedeji and the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, (NNPC), Mele Kyari, represented by the company’s Chief  Financial Officer, Umar Ajiya.

A statement by Umahi’s spokesman, Uchenna Orji, said the ministry, FIRS and the NNPC have also agreed to prepare a joint memo to President Bola Tinubu, in efforts to salvage the scheme and to suggest ways to make it more efficient.

One of the suggestions, the statement noted, was that the process would now be channelled through the National Assembly for approval.

Last Wednesday, Adedeji had faulted the three-year-old scheme introduced through Executive Order 7, 2021, during his appearance before the Senate Committee on Finance, along with NNPC’s Ajiya.

The Senator Sani Musa-led committee had invited the two officials to shed light on the implementation of the scheme despite the poor state of federal roads across the country.

But while the NNPC said N664 billion had been spent so far, the FIRS boss hinted that the scheme was unlawful and should be discontinued.

 “The mandate of FIRS lumped with execution of tax credit scheme for road construction, is to access, collect tax and remit it into the federation account and not to appropriate it for any purpose through executive order.

“It is not the duty of FIRS and NNPC to be paying contractors. The Ministry of Works should be in line with its core mandate, allowing to award road contracts and pay for them…We should stop increasing speed towards the wrong direction,” he stated.

But the statement pointed out that Umahi restated the commitment  of the federal  government  to the implementation of the scheme.

“The minister said that President Bola Tinubu has not only said that the implementation of the tax credit scheme should continue, including  private, NNPC and NLNG, but has also approved the review  of the projects under  the scheme  due to inflation.

“The minister said the statement of the chairman  of  FIRS  that the project  would be completed, but would not be expanded was misconstrued  by some media quarters as saying  that the projects under  the scheme  would be  stopped,” it added.

It quoted Umahi as further reiterating that the scheme  is highly  beneficial  and that the implementation framework  is encapsulated  in an executive  order of the federal government.

Part of their agreement, it said, was that all the NNPC projects on road infrastructure as started, should not be expanded, but should continue to the tune of N2.59 trillion.

“It was also agreed at the beginning of this executive order, and it was very clear that the N2.59 trillion was not the total cost of the project. Sometimes, it’s about 40 percent funding, sometimes it’s about 50 percent funding.

“So, ab initio, the cost of the project up to completion was not N2.59 trillion. Now, we have scoped the entire project and then put a review on it, and the funding gap is N2.7 trillion.

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

While thanking the Chairman of FIRS and the GCEO NNPC for their “commitment” to the scheme, the minister noted that some of the challenges were discussed, such as the problem  of methodology for programme implementation and that they resolved  to adopt a more robust  approach to solve the problem.

He also said that part of their resolutions was that non-performing contracts shall be terminated.

“Contractors should go back to site and we are going to unequivocally terminate contracts that are not performing in the coming weeks and this we will do definitely.

“We are going to encourage even the local contractors, especially those who can do concrete roads, to come forward and register and we patronise them,” the minister said.

He expressed happiness that the NNPC project will be completed and that an agreement had been reached that it will not be expanded beyond the last seven projects that were initiated by the last administration.

Emmanuel Addeh

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