Minister of Power, Works and Housing Babatunde Fashola, told State House reporters that the approval was based on a memo by his ministry seeking to take benefits of tax policies and laws “for the purpose of using them to drive infrastructure development renewal.”
According to him, 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.
“Even as an individual, you’re entitled to make this claim if the infrastructure goes through this type of process and is approved by government. So, it’s not a Dangote issue, but an economic policy that stimulates investment in infrastructure renewal or in any other area that government feels it needs private sector to compliment its efforts in such area.
So, the detail is about 30 per cent income tax obligation spread over time. It doesn’t mean they won’t pay tax, they’ll continue to pay their tax obligation. But they’ll get remission for making this investment because ultimately, the road doesn’t belong to them, but to government and it’s for the benefits of Nigerians. So, it’s like credit advance to government,” he said.
Fashola also stated: “So, we presented a proposal by one of the subsidiaries of Dangote Group, a construction company, for the construction of a section of Lokoja-Obajana-Kabba-Ilorin Road, specifically the section between Obajana-Kabba Road using cement as demonstrative of how perhaps we should continue to build going forward in order to reduce maintenance on the road and the company proposing to fund the construction of that section of the road in exchange for some tax remission.”