FG grants Dangote Cement ₦22.32bn tax credit

From Uche Usim, Abuja

Dangote Cement PLC has secured tax credit from the Federal Inland Revenue Service (FIRS)  valued at ₦22.321billion.

The revenue agency issued the tax credit certificates for the construction of Apapa-Oworonshoki-Ojota road in Lagos and the Lokoja-Obajana-Kabba road connecting Kogi and Kwara States.

The tax credit certificates for the Apapa – Oworoshoki – Ojota expressway is valued at ₦21.6 billion while the tax credit certificate for the Lokoja-Obajana-Kabba expressway is valued at ₦721 million.

FIRS in a statement released on Wednesday stated that while Julius Berger is handling the construction of these two federal roads, Dangote Cement Plc is providing the funding.

As a way of encouraging and compensating Dangote Cement, the federal government issued the company tax certificates to relieve Dangote Cement of huge taxes it would have paid.

Executive Chairman of the FIRS, Muhammad Nami, represented by Coordinating Director, Tax Operations Group, Mr. Femi Oluwaniyi gave this clarification in Abuja when he presented the two tax credit certificates to Dangote Cement.

This is the second tax credit certificate the Federal Inland Revenue Service (FIRS) will be issuing to Dangote for the Lokoja-Obajana-Kabba road construction. ₦9.5billion tax credit certificate had earlier in 2019 been awarded to Dangote Cement Plc for the Lokoja-Obajana-Kabba road.

He said: “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 the government as taxes they would have paid.”

He added: “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”.

He prayed that “we are hoping that this arrangement will be taken to another level, we are also believing that this will spur other business players out there to come and take advantage of it”.

Issuing 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.

Responding on behalf of Dangote Cement Plc, Mr 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 todays modern state it is not possible to encompass every service that the public requires even if the states have the funds”.

He stated that “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 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”.