The Federal Government of Nigeria, on 25 January 2019, signed Executive Order 007 (the Order) on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (the Scheme). The Order enables private companies to build federal roads in Nigeria and be rewarded with tax credits in return. The Order is coming on the heels of the Road Trust Fund (RTF) scheme which was approved by the Federal Executive Council in October 2017. (Please click here for our earlier publication on the RTF).
According to the Order, private sector companies who spend funds on constructing and refurbishing eligible roads will be able to recover the value of their investment as tax credits against future tax payable. The tax credit would be granted after the project has been verified and approved based on set criteria.
Interested participants are required to submit a proposal to undertake road projects to the government, through the Scheme's management committee, to be chaired by the Minister of Finance. Upon submission, eligible projects would be selected by the President. We expect the Federal Government to issue an official gazette and provide further details on how the process will be implemented in the nearest future. We will continue to monitor this space and provide updates as they become available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.