FAAC Flags Poor Responses in Road Tax Scheme Review
The Federal Account Allocation Committee has intensified its scrutiny of the Road Infrastructure Tax Credit Scheme after revealing that only a fraction of participating companies have so far complied with requests for disclosure on project participation, expenditure commitments, and implementation progress.
The development has reignited long-standing debates around transparency, accountability, and the wider fiscal implications of the programme on government revenue distribution.
The focus of the latest assessment was contained in the November 2025 report of the FAAC Post-Mortem Sub-Committee, which reviewed tax-related deductions linked to the scheme between February 2024 and September 2025.
The report indicated that despite repeated correspondence with federal institutions and beneficiary companies, responses have remained limited, constraining the committee’s ability to reach a conclusive position on the scale and impact of the deductions.
According to the document, letters had earlier been dispatched to the Federal Ministry of Finance, the Federal Ministry of Works, the Federal Inland Revenue Service, and a number of corporate organisations involved in the Road Infrastructure Tax Credit Scheme.
The requests sought detailed breakdowns covering level of participation, financial contributions, and the execution status of approved road projects implemented under the initiative since 2019.
Among the companies contacted were BUA International Limited, Dangote Cement Company Limited, the Nigerian National Petroleum Company Limited, Nigeria Liquefied Natural Gas Limited, Mainstream Energy Solutions, GZ Industries Limited, and MTN Nigeria.
However, the FAAC report confirmed that only three organisations had submitted formal responses, which were subsequently forwarded to the FIRS for authentication.
Despite this limited compliance, the committee noted that the ongoing exercise remains incomplete.
It stressed that additional disclosures are required before any final assessment can be made, reiterating that the review remains a work in progress.
The development has amplified stakeholder concerns over transparency lapses in a scheme that significantly affects shared national revenues.
FAAC Flags Poor Responses in Road Tax Scheme as Revenue Deductions Deepen
Beyond documentation gaps, the committee’s findings also revealed that substantial financial deductions tied to the Road Infrastructure Tax Credit Scheme had already been implemented within the review period.
The report disclosed that a combined total of $577.60 million and ₦822.31 billion was deducted between 2024 and 2025 from revenue streams accruing to the Federation Account.
A breakdown of the figures showed that monthly deductions averaging $52.51 million were withdrawn from the NNPCL Joint Venture Gas Companies’ Income Tax between February and December 2024, resulting in the cumulative dollar-denominated deduction of $577.6 million for the year.
While no further foreign currency deductions were recorded for 2025, naira-linked withdrawals surged, with ₦151.27 billion deducted in February and ₦671.04 billion in April alone.
The committee however cautioned that the amounts captured do not reflect the entire value of tax credit-related deductions executed under the programme.
Other agencies benefiting from earlier phases of the scheme, particularly those preceding 2024, were not yet fully documented in the current review, meaning the total impact could be significantly higher.
FAAC members had previously expressed concerns regarding the sustainability and fiscal consequences of the Road Infrastructure Tax Credit Scheme.
At several plenary sessions, including the August 2024 meeting and a later session in Bauchi, delegates questioned the deduction structure and called for temporary suspension of further withdrawals pending a comprehensive reconciliation process.
Several state-level representatives also argued that while the scheme supports critical infrastructure delivery, the associated deductions shrink distributable revenues to sub-national governments, undermining budget planning and social service funding.
FAAC Flags Poor Responses in Road Tax Scheme as FG Considers Structural Reforms
Introduced in 2019, the Road Infrastructure Tax Credit Scheme was created to mobilise private sector financing for the rehabilitation and construction of key federal roads.
Under the arrangement, participating companies recover their investments through tax credits offset against their Companies Income Tax obligations.
The programme is jointly supervised by the Ministries of Finance and Works, with regulatory oversight by the FIRS.
While the initiative has accelerated the delivery of strategic highway projects, concerns have persisted regarding reporting gaps, deduction transparency, and long-term implications for national revenue assurance.
The scheme had earlier financed major projects including the Apapa-Oshodi-Oworonshoki-Ojota Expressway and was later expanded, with Phase Two of the NNPCL-backed tax credit plan valued at over ₦1.5 trillion.
In a recent engagement with contractors and ministry officials, the Minister of Works, David Umahi, announced a restructuring of payment arrangements for NNPCL-sponsored road projects.
He disclosed that funding responsibilities will now migrate directly to the Ministry of Works to eliminate ambiguities and ensure unified financial supervision.
Under the revised framework, contractors are required to formally exit previous tripartite agreements involving NNPCL, the Ministry of Finance, and FIRS before receiving outstanding payments.
Umahi confirmed that President Bola Tinubu had authorised settlement of verified certificates under NNPCL-funded road projects estimated at about ₦263 billion, but insisted that compliance with the new structure remains a prerequisite for disbursement.
The minister further disclosed that ongoing projects will be re-scoped and segmented to align with realistic delivery timelines, with increased field monitoring and a strengthened supervision regime within the ministry.
As the FAAC Post-Mortem Sub-Committee continues its review, analysts say the report underscores the need for stronger disclosure standards, improved inter-agency coordination, and a more transparent reporting framework for tax-credit-funded infrastructure projects.
For now, the ongoing assessment — and the fact that FAAC flags poor responses in road tax scheme documentation — signals rising scrutiny over how deductions are applied, how projects are executed, and how the financial burden is ultimately shared across tiers of government at a time of mounting fiscal pressures.
