The Executive Council (FEC), has approved Dangote Group subsidiary to construct the Obajana-Kabba Road in Nigeria.
The Dangote Group subsidiary will execute the project in exchange of tax waiver benefits. According to Babatunde Fashola, Power Minister Works and Housing stated that the approval is based on a memo by his ministry seeking to take benefits of tax policies and laws for the reasons of driving infrastructure development renewal.
He added that, “There is an existing tax policy that a corporate organisation or an individual that makes investment on the infrastructure of a public nature should be entitled to make claims for remission on its income tax obligation.”
However, individuals are also entitled to make this claim if the infrastructure goes through this type of process and is approved by the government. Additionally, the government will renew and stimulates the policy investments in infrastructure or in any other area that government feels it needs private sector to complement its efforts in such identified area.
Dangote subsidiary has been granted 30% income tax obligation spread over time. However, It doesn’t mean they won’t pay tax, instead they will continue to pay their normal tax obligation but in this case the company will get remission for making this investment because ultimately, the road doesn’t belong to them, but to the government and it’s for the benefits of Nigerians and the nation as a whole, in other words this kind of agreement is like credit advance to government.
Dangote Group subsidiary will execute a section of Lokoja-Obajana-Kabba-Ilorin Road, specifically the Obajana-Kabba Road section. The road project will be constructed using cement as demonstrative of how perhaps the nation should continue to build going forward in order to reduce maintenance on the road. The company has proposed to fund the construction of that road section in exchange of tax remission.