Business - News - April 29, 2021

Dangote Cement scoops another ₦22.32bn tax credit from Nigerian govt.

Dangote Cement Plc, a member of Dangote Group, has received from the Federal Government another set of tax credit certificates valued at about ₦22.321billion, the Federal Inland Revenue Service (FIRS) has said.
The FIRS said on Wednesday in Abuja the tax credit certificates were to compensate for the cement manufacturing firm undertaking the funding of the construction of two federal roads in Lagos, Kogi and Kwara States.
The Chairman of the FIRS, Muhammad Nami, who disclosed this named the roads as the Apapa-Oworonshoki-Ojota road in Lagos, and the Lokoja-Obajana-Kabba road straddling Kogi and Kwara States.
While Julius Berger PLC handled the construction of these two federal roads, Dangote Cement Plc provided the required funding.
Nami, who spoke through the Coordinating Director, Tax Operations Group, Femi Oluwaniyi at the presentation of the two tax credit certificates to Dangote Cement explained that the federal government issued the certificates to cover the tax the company would have paid for the year.
Details of the tax credit certificates revealed that the amount for thd Apapa – Oworoshoki – Ojota expressway was valued at about ₦21.6 billion, while the tax credit certificate for the Lokoja-Obajana-Kabba expressway was valued at about ₦721 million.
Nami disxlosed that this was the second tax credit certificate the
FIRS would be issuing to Dangote Cement in respect of the Lokoja-Obajana-Kabba road construction. In 2019, about ₦9.5billion tax credit certificate was previously issued to Dangote Cement Plc for the Lokoja-Obajana-Kabba stretch of the road.
Nami said the decision by the FIRS to issue Dangote Cement the tax credits certificates was in line with the policy by the government to encourage local investors to undertake the provision or rehabilitation of critical infrastructures like roads.
He said such an arrangement was under an agreement subject to some due monitoring and approvals for some of the monies they would have accrued back to the government as taxes they would have paid.
“It will be in the interest of the government that if other investors, business entrepreneurs, companies take advantage of this key initiative, Nigeria can develop faster than the government would have done alone,” the FIRS Chairman said.
Expressing the hope that this arrangement would be taken to another level, the FIRS chief said the government believes this would spur other business players in the country to key in and take advantage of it.
Issuing tax credit certificates to companies that undertake the provision or rehabilitation of infrastructure was made possible by Executive Order 07 of 2019 signed by President Muhammadu Buhari on road infrastructure tax credit.
“What that entails is that companies are encouraged to develop infrastructure around their areas of operation as long as it would enhance their service delivery. Their business is not to take over the responsibility of the government, because it will ultimately impact on the immediate operational environment the government is supposed to take care of,” the FIRS Chairman explained.
Responding in behalf of Dangote Cement Plc, the Group Executive Director, Govenment and Stakeholders Relations, Mansur Ahmed, said “although 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, in today’s modern state, it is not possible to encompass every service that the public requires, even if the states have the funds”.
To do it at the same time the public requires, he said, was often not possible, necessitating the need for the state to engage private actors to participate in  the process.
“While it remains the responsibility of state to provide services and infrastructures, the ability of ths private sector 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 the President through this Executive Order No. 07, we jumped at the opportunity,” Ahmed said.
 

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