Federal Executive Council (FEC), Wednesday approved the establishment of Road Trust Fund meant to give tax relief to the private sector.
Mrs. Kemi Adeosun, Minister of Finance said, “Council approved the memo for the establishment of Road Trust Fund structure. The memo was presented with the input of the minister of power, works and housing. It is the PPP (Public, Private Partnership) initiative that will allow the private sector to get involved in road construction in exchange for tax credit.”
On what was unique about the scheme, Mrs. Adeosun said the road trust fund would help build on an existing scheme that availed tax credit, adding that it would be one company per road.
She further said: “We have found that only two companies have been able to take advantage of it. The tax will be recovered over a three year period. We expect this to mobilize significant capital into road provision across the country.
The ministry of works will be approving the design and the cost of those roads. The BPP (Bureau for Public Procurement) will also provide certificates of no objection to make sure that the costs are reasonable, ministry of works will supervise.”
She said the expectation of the government was qualitative road delivery, especially in areas of industrial clusters affected by very bad roads.
According to her, “They can get together, do the road and recover their money through the tax credit system. We expect the impact on revenues to be neutral because we are tightening our tax code but we still put in a limit that no company can apply and use more than 50 per cent of the tax within a year for this scheme.
“A company doesn’t have to be active in that area, so a bank, oil company, service company could get involved. We are really trying to widen the pool of funds for road construction,” she said, adding that a total ofN450 billion had been released for capital projects in 2017.
Also briefing, Babatunde Fashola, Minister of Power, Works and Housing, said he presented a memo on behalf of Transmission Company of Nigeria, TCN, for the construction of 14km, 330 KVA transmission line to get them ready to evacuate the Azura Power plant in Edo State when it will be ready in May 2018.
Fashola said: “Council approved the memo for the construction of that line for the sum of N796.6m. We expect to finish the work in seven months.”
