The Nigerian National Petroleum Company Limited (NNPCL) has deducted $525.09 million from its payments to the Federal Inland Revenue Service (FIRS) in 2024. This deduction is part of the Road qInfrastructure Tax Credit Scheme (RITCS), which allows companies to fund road projects and offset their tax liabilities.
A report from the Federation Account Allocation Committee (FAAC) meeting in January 2025 revealed that NNPCL made monthly deductions of $52.51 million between February and November 2024 for this purpose.
However, state representatives have raised concerns about these deductions. They argue that road construction is the Federal Government’s responsibility and believe their share of the funds should be calculated based on the existing Revenue Allocation Sharing Formula and refunded to them.
To address these concerns, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission has formally requested detailed information from FIRS about the tax credits granted to NNPCL and other organisations involved in the scheme.
The RITCS enables companies with significant tax obligations to undertake road construction projects in agreement with the Federal Government, using the infrastructure development to offset their taxes. Notably, this scheme funded the completion of the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota expressway.
In 2023, the government approved N1.535 trillion for Phase 2 of the NNPCL tax credit scheme, following the company’s announcement to invest N1.9 trillion in infrastructure development under the scheme.
As discussions continue, stakeholders are keen to resolve the issues surrounding these deductions to ensure transparency and fairness in the allocation of resources for national development.