Matters arising from the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order, 2019
According to the Infrastructure Concession Regulatory Commission, Nigeria has about 195,000 km of road network out of which about 32,000 km are federal roads and 31,000 km are state roads. In total, only about 60,000 km are paved leaving 135,000 km of road untarred. A large proportion of the paved roads are in bad conditions due to poor maintenance.
President Muhammadu Buhari on 25 January 2019 signed a 10-page Executive Order No. 007 known as the “Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019” described as a Public-Private Partnership intervention to enable government leverage private sector funding in a manner that creates value for money through private sector discipline. The Order is accompanied by an 11-page Regulation made up of First Schedule on the Administration and Operation of the Scheme while the Second Schedule contains a sample MoU for eligible road projects.
… if diligently implemented the Scheme can bring huge benefits to all stakeholders. It should prevent budget padding, reduce contract inflation, cut down political patronage and rent-seeking, ensure timely project completion, reduce abandonment of projects and address sub-standard quality of work. It should however be worthwhile for the private sector and not be at excessive cost to the government.
Read my article and our alert below for details. Also download a copy of the Order for ease of reference.
Download Let there be roads…Feb2019
Download PwC Tax Alert_Road Infrastructure Development Scheme_Jan2019