States in Nigeria have raised concern over deductions by the country’ petroleum Company, the Nigerian National Petroleum Company Limited (NNPCL) from its Federal Inland Revenue Services (FIRS) Remittances.
The Nigerian National Petroleum Company Limited (NNPCL) deducted a total of $525.09 million from its remittances to the Federal Inland Revenue Service (FIRS) under the Road Infrastructure Tax Credit Scheme (RITCS), sparking concerns among state governments.
According to a Federation Account Allocation Committee (FAAC) report from a January 2025 postmortem sub-committee meeting, NNPCL made monthly deductions of $52.51 million from funds due to FIRS for Joint Venture Gas and Company Income Tax between February and November 2024.
The RITCS allows private companies to invest in critical road infrastructure in exchange for tax relief.
However, state representatives at the FAAC meeting objected to the deductions, arguing that road construction is the responsibility of the Federal Government.
In August 2024, FAAC members called for a suspension of the deductions, demanding that their share of the withheld funds be calculated based on the existing revenue-sharing formula and refunded.
During the FAAC plenary in Bauchi, members reiterated their stance, prompting the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission to formally request detailed information from FIRS on the tax credits granted to NNPCL and other companies under the scheme.
According to the report, “The Sub-National position was that it is the responsibility of the Federal Government to construct roads; hence, the share of the Sub-National should be computed based on the existing Revenue Allocation Sharing Formula and refunded to them.”
The Road Infrastructure Tax Credit Scheme has been instrumental in projects such as the 32-kilometre Apapa-Oshodi-Oworonshoki-Ojota expressway.
However, state governments are now pressing for transparency and a resolution regarding the deductions.
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