Executive Order 7 Of 2019 On The Road Infrastructure Development And Refurbishment Investment Tax Credit Scheme
REVIEWING THE COMPANIES INCOME TAX (ROAD INFRASTRUCTURE DEVELOPMENT AND REFURBISHMENT INVESTMENT TAX CREDIT SCHEME) AND RELATED MATTERS
Pursuant to the powers conferred on him by the Constitution of the Federal Republic of Nigeria and the provisions of section 23(2) of the Companies Income Tax Act (CITA), the Nigerian President, Muhammadu Buhari, GCFR, recently signed into law, Executive Order No. 007 of 2019 to be cited as the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019 (“EO7 of 2019” or “the Scheme”).
EO7 of 2019 comprises six paragraphs, with each containing several sub-paragraphs, and deal with issues ranging from establishment of a management committee charged with responsibility for implementing and administering the Scheme to the issuance of the road infrastructure tax credit itself.
The main objective of the Scheme is to accelerate road infrastructure development for balanced economic growth in Nigeria by granting approval to private sector entities to construct and refurbish eligible roads across the country in exchange for tax credits, which could then be applied against company income tax payable. Thus, the motivation for the Scheme derives from the desire to take advantage of private sector funding and discipline to enhance road infrastructure development in the country. The Scheme has a life span of ten years reckoning from the commencement of EO7.
Upon inauguration of the Scheme, the President indicated that it would provide another opportunity to demonstrate the commitment of the administration to conceive, design, develop and deliver Public Private Partnerships (PPPs) with notable investors in order to close the road infrastructure gap in the transportation sector due to revenue shortfalls that have hampered government’s efforts to fully fund critical projects. The President further explained that through these innovative funding mechanisms, government would be able to address the challenges of project funding, cost variation and completion risks that have plagued the development of the nation’s critical roads infrastructure assets.
Under the Scheme, companies that are, for instance, disposed to spending their own funds on constructing roads to their factory and business locations, will recover their construction costs by paying reduced taxes, over a period of time. Consequently, the Scheme focuses on the development of eligible road infrastructure projects in an efficient and effective manner in order to create value for money and guarantee participants in the Scheme timely and full recovery of their construction/project costs by way of company income tax credits.
It bears noting that there are existing infrastructure tax credits provided by the Companies Income Tax Act (as amended) (“CITA” ) and the Pioneer status incentives granted under the provisions of the Industrial Development (Income Tax Relief) Act (“IDITRA”). Without doubt, some of the burning questions that may agitate the minds of potential and actual participants of the Scheme include whether participation under the Scheme would bar enjoyment of other infrastructure tax credits provided for under the CITA and whether there are any advantages that the terms of the Scheme offer in comparison with its predecessors? This article would attempt a review of the provisions of the EO7 of 2019, CITA and other infrastructural tax relief regimes, and their potential to accelerate infrastructural growth in Nigeria.
- EXISTING TAX INCENTIVES ON INFRASTRUCTURAL DEVELOPMENT
In the past, government has intervened through, inter alia, trust funds and tax incentives to address Nigeria’s infrastructural deficit.
A company operating in Nigeria is expected to pay the rate of 30 kobo for every naira in respect of the total profits for each year of assessment. Section 23 (2) of CITA generally empowered the President to exercise his discretion to exempt by order‐
(a) any company or class of companies from all or any of the provisions of this Act; or
(b) from tax all or any profits of any company or class of companies from any source, on any ground which appears to it sufficient.
The various tax incentives on infrastructure and funds established under legislation in Nigeria are as follows:
- Pioneer status under the provisions of the Industrial Development (Income Tax Relief) Act
- Rural investment allowance
- The Companies Income Tax (Exemption of Profits) Order 2012
- Road Trust Fund 2017
- Presidential Infrastructure Development Fund 2018
- Pioneer Status under the provisions of the Industrial Development (Income Tax Relief) ActPioneer status is a tax incentive which exempts the applicant company from corporate income taxes for an initial three-year period which is renewable for one or two years.
- Rural investment Allowance:
It is important to note that section 34 of the CITA contains provisions which aim to encourage companies to invest in rural areas and provide the infrastructure/facilities incidental to such investments, by way of government offering a rural investment allowance. However, a major reason for the ineffectiveness of this incentive scheme is the requirement for the relevant trade or business to be sited in a location that is at least 20 kilometres away from similar amenities provided by the government. Also, the incentive does not permit companies to carry forward the allowance whenever it cannot be fully exhausted. EO7 of 2019 doesn’t share these limitations. For the purpose of more clarity, the provisions of sections 34 and 40 of CITA are reproduced below:
Sections 34 and 40 (11) of CITA on Rural investment allowance:
(1) Where a company incurs capital expenditure on the provisions of facilities such as electricity, water, tarred road or telephone for the purpose of a trade or business which is located at least 20 kilometers away from such facilities provided by the government, there shall be allowed to the company in addition to an initial allowance under the Second Schedule to this Act an allowance (in this Act called “rural investment allowance”) at the appropriate per cent certain as set out in subsection (2) of this section of the amount of such expenditure:
Provided that where any allowance has been given in pursuance of this section, no investment allowance under section 32 of this Act shall be due or be given in respect of the same asset or in addition to the allowance given under this section.
(2) The rate of the rural investment allowance for the purpose of this section shall be as follows‐
(a) no facilities at all……………. 100%
(b) no electricity……………………. 50%
(c) no water…………………………. 30%
(d) no tarred road……………………15%
(e) no telephone………………………5%
(3) For the purpose of this section the rural investment allowance shall be made against the profits of the year in which the date of completion of the investment falls and the allowance or any fraction thereof, shall not be available for carry forward to any subsequent year whenever full effect cannot be given to the allowance owing to there being no assessable profits or assessable profits less than the total allowance for the year the investment was made.
Section 40(12) of CITA, however, provided that a company shall not be allowed to claim the investment tax relief for more than 3 years and the relief shall not be available to a company already granted pioneer status.
Save as has been stipulated in paragraph 4(15), E07 of 2019, which prevents a participant who has enjoyed a road infrastructure tax credit on an eligible road from benefiting from any other tax credit, capital allowance, relief or incentive on project costs incurred on an eligible road, there is no restriction as to how long the tax credit granted under EO7 of 2019 may be enjoyed.
- The Companies Income Tax (Exemption of Profits) Order 2012
The Companies Income Tax (Exemption of Profits) Order, 2012 (the “Order”) was made by the President in exercise of his powers under section 23(2) of the Companies Income Tax (CIT) Act, Cap C21, Laws of the Federation of Nigeria, 2004 (as amended).
The Order was made on 27 April 2012, but was only made public on October 4, 2012. The Order had a commencement date of 27 April 2012 and was designed to be in force for 5 years from the commencement date.
Paragraph 3 of the Order granted qualifying companies a CIT exemption of 30% of the cost incurred in providing infrastructure or facilities of a public nature. Based on the paragraph, “infrastructure or facilities of a public nature” include: power (electricity); roads and bridges; water; health, educational and sporting facilities; and other facilities as may be approved from time to time by the Minister of Finance and published in the Federal Government Gazette upon the recommendation of the Federal Inland Revenue Service (FIRS).
The Order provided that the Infrastructure Tax Relief (ITR) will be granted in addition to the usual deductions allowed in respect of the costs incurred under the relevant provisions of the CIT Act, “and shall form part of the deductible expenses of the company”. In effect, the ITR was treated as an allowable expense to be deducted in arriving at assessable profits, and not as a relief to be set off against assessable profits. An ITR was claimed by a company in the assessment period in which the infrastructure or facility is provided.
To qualify for ITR, the relevant infrastructure and/or facilities must have been completed by the company and available for use by the company and the public or the community where the infrastructure/facilities are sited. However, the Order provided exceptions where public use is impracticable or an exemption is obtained from the Minister of Finance.
- Road Trust Fund 2017
The Federal Executive Council at its meeting on Thursday, 26 October 2017, approved the establishment of Road Trust Fund (RTF). RTF was conceptualized as a PPP initiative by Federal Ministry of Finance (FMF) and Federal Ministry of Power, Works and Housing (FMPWH). The aim is to incentivize private sector participation in the development of federal road infrastructure through a tax credit scheme.
RTF is a revision of the infrastructure tax relief (ITR) incentive under the erstwhile Companies Income Tax (Exemption of Profits) Order, 2012. ITR granted companies that incurred expenditure of public nature (including road construction), tax relief of 30% of the cost of incurred on providing the infrastructure. The relief is enjoyed via deduction from the income tax of the company.
Unlike ITR, RTF operated under a collective model to mobilize private capital from companies which were used to undertake road projects through stand-alone collective infrastructure funds using a special purpose vehicle. It involved financial intermediaries which were expected to promote RTF projects and solicit for funds from interested companies. The design and cost of the roads were approved by the FMPWH and also certified by the Bureau of Public Procurement (BPP).
Expected benefits for companies who took advantage of the Scheme include:
- 100% recovery of costs incurred on road infrastructure as tax credit against total tax payable over a three-year period
- Accelerated depreciation to enable cost recovery in 3 years rather than 4 years for standard assets
- Ability to intervene in roads critical to a company’s business
Some of the benefits of the RTF to the country include:
- Increased funds for road development and accelerated road provision across the nation
- Alternative funding to the government for road infrastructure development which will reduce pressure on the federal budget
- Efficient delivery of road projects and reduction of project costs.
- Presidential Infrastructure Development Fund 2018
The federal government on May 17, 2018, announced the establishment of a Presidential Infrastructure Development Fund (PIDF), which is to be managed by the Nigeria Sovereign Investment Authority (NSIA).
The fund is to be invested specifically in critical road and power projects across the country.
The National Economic Council (NEC) has also authorised the initial transfer of $650 million to the NSIA from the Nigeria Liquefied Natural Gas (NLNG) Dividend Account, as seed funding for PIDF.
This initiative was to eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets such as the 2nd Niger Bridge, Lagos to Ibadan Expressway, East—West Road, Abuja to Kano Road, Mambilla Hydroelectric Power over the last few decades.
- REVIEW OF THE COMPANIES INCOME TAX (ROAD INFRASTRUCTURE DEVELOPMENT AND REFURBISHMENT INVESTMENT TAX CREDIT SCHEME) ORDER 2019
The E O 7 of 2019, to be cited as the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019 approved a tax credit scheme to attract private sector involvement in the provision of road infrastructure assets across Nigeria. The Scheme is expected to be in force for a period of 10 years from its commencement; and the President of the Federal Republic has the power to amend the Order from time to time as may be deemed necessary. A participant in the Scheme can be any company registered in Nigeria, a pool of companies or institutional investors.
It is an Order comprising 6 paragraphs which deal with the recital to the order; the establishment of the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme; the Road Infrastructure Tax Credit; issuance of Road Infrastructure Tax Credit Certificate; utilization of the Road Infrastructure Tax Credit; the interpretation clause and citation. The order also contains two schedules. Schedule one deals majorly with the composition and functions of Scheme’s management committee; information required to be submitted to management committee by applicants seeking to be participants in the Scheme; requirements for issuance of the tax credit certificate and conditions for transfer of a tax credit certificate. Schedule two relates to the memorandum of understanding (template) which would be entered with participants after the President has approved an eligible road project.
An attempt to provide more granular details of the various paragraphs in the Order appears below.
The Road Infrastructure Tax Credit (RITC)
The Scheme entitles Participants to utilize the project cost incurred in the construction or refurbishment of eligible roads as a credit against companies income tax that is payable. In doing so, Participants are afforded a single uplift equivalent to the prevailing Central Bank of Nigeria Monetary Policy Rate (MPR) plus 2% of the Project Cost. And where such uplift is granted, it shall not constitute taxable income in the hands of the Participant or a Beneficiary.
Participants are at liberty to utilize this RITC from the relevant fiscal year in which the project is incurred, until it is fully utilized. However, the amount of RITC that may be utilized in any year of assessment shall be limited to 50% of the company’s income tax payable by the Participant for that year of assessment. Where there is any unutilised tax credit, it shall be available to be carried forward by the Participant to subsequent tax years.
However, as with similar schemes in the past, where a Participant takes benefit of the RITC under the Scheme, it shall not be entitled to claim any other tax credit, capital allowance, relief or incentive on the Project Cost incurred in respect of that Eligible Road under any law in force in Nigeria.
Administration and Implementation of the Scheme
The responsibility for administering and implementing the Scheme belongs to the Road Infrastructure Refurbishment and Development Tax Credit Scheme Management Committee (“the Committee”) set up under EO7 of 2019.Also, the Committee will approve the issuance of RITC certificates to Participants annually, in proportion to the Project Costs incurred by them in that year. Furthermore, the Committee is charged with the task of registering Participants under the Scheme. Other agencies of government have been empowered to play different roles under the Scheme and these other agencies are as follows:
- Federal Ministry of Finance
The Federal Ministry of Finance is in charge of the establishment and maintenance of funds for the operations and management of all road projects executed under the Scheme.
- Federal Ministry of Works
This Ministry has three major roles to play in relation to the Scheme and they are as follows:
- Publication of the design and specification of Eligible Roads;
- issuance of contract award letter following approval of road infrastructure development contract where it may be required; and
- carrying out periodic quality control inspection exercises.
- Bureau of Public Procurement (“Bureau”)
All costs and contractors would be scrutinized and approved by the Bureau in line with legal requirements. The Bureau will ensure that costs are not inflated and that unqualified contractors are not engaged for the projects.
- Federal Inland Revenue Service (FIRS)
Under the Scheme, the FIRS is required to undertake the following major actions:
- Issuance of certificates to Participants through the Committee;
- maintenance of a registrar of Participants and Beneficiaries and a record of issued RITC certificates to Participants and Beneficiaries of the Scheme;
- preparation of an annual return of all RITCs;
- updating of the record of issued RITC certificates, de-registration of old Participants and issuance of new certificates to new Beneficiaries.
The following identified class of entities is eligible to participate under the Scheme:
- Companies (other than a corporation sole) registered under CAMA or any other law in force in Nigeria.
- Pool of companies operating through a special purpose vehicle registered with and designated by Securities and Exchange Commission (SEC) for the purpose of the Scheme.
- Institutional investors duly registered as a company or companies under Companies and Allied Matters Act of any other law in force in Nigeria.
The Road Infrastructure Tax Credit Certificate
It is important to mention that Participants cannot benefit from the Scheme unless they have been issued with a RITC certificate. When the Committee has approved the Participant’s application for RITC, the FIRS shall then issue a RITC certificate to such Participant on an annual basis.
Application of Road Infrastructure Tax Credits (RITCs)
The following rules shall regulate the manner in which tax credits secured under the Scheme may be applied by a Participant to the payment of company income tax until fully utilized.
- It bears mentioning from the outset that even where a company possesses a RITC certificate, no tax credit shall be applied for settlement of company income tax unless claimed by a Participant or Beneficiary in its tax returns for the year of assessment.
- Participants in the Scheme are entitled to recover the cost incurred by them in the construction or refurbishment of Eligible Roads as credit against companies income tax (“CIT”) payable. However, such companies are limited to utilizing the tax credit obtained to defray a maximum of 50% (fifty percent) of the CIT payable for the relevant year of assessment. However, that limitation is dispensed with where the Participant has been involved in the construction or refurbishment of Eligible Roads in Economically Disadvantaged Areas.
- Participants are also entitled to a single uplift, equivalent to the CBN Monetary Policy Rate plus 2% of the Project Cost. This uplift will not be subject to tax.
- A Participant is entitled to dispose of or transfer its RITC to other companies in the same manner a security may be sold in a relevant securities exchange.
- An unused RITC within the year of assessment can be carried over by the Participant or Beneficiary to a subsequent tax year. This is clear departure from earlier tax relief measures which tend to impose timelines for their enjoyment.
Requirements to be fulfilled before a Private Company can benefit from the Scheme:
- Registration and certification by the Committee as a Participant or representative of a Participant of the scheme;
- designation as a Beneficiary under the Scheme;
- provision of evidence of certification of the Project Cost by the Committee;
- tax credit must be claimed by the Participant in its tax return for that year of assessment;
- Evidence that the project is economically viable, cost efficient and can be completed in a timely manner (within 12 to 48 months).
Tradability and Registration of Road Infrastructure Tax Credit (RITC) Certificate
An exciting introduction by the Scheme is the ability of holders of the RITC certificate to trade it as a financial instrument on a relevant securities exchange and have same registered accordingly. Consequently, Participants are at liberty to undertake a disposal of the whole or part of their certificate to willing buyers on a relevant securities exchange in the same manner as they would shares, bonds and other securities. However, such sale must be reported to the Committee, which will then have to de-register the Participant and register the new Beneficiary.
Furthermore, where such Participant or Beneficiary indicates that it no longer wants the certificate for trade on the relevant securities exchange, it shall notify the Committee and provide evidence of its de-registration. EO7 of 2019 further states that the tax credit may qualify as an asset in a Participant’s or Beneficiary’s financial records and will have to comply with International Financial Reporting Standards (IFRS). However, although the essence of the Scheme is to offer tax credits to Participants, any gains arising from the disposal of the tax credit will be subject to tax.
- POTENTIAL IMPACT OF THE ROAD INFRASRUCTURE TAX CREDIT SCHEME ON THE EASE OF DOING BUSINESS ENVIRONMENT
One of the major ways in which the Ease of Doing Business in any country may be incentivized is the interventionist role that government plays in providing an enabling environment and attracting private sector capital and discipline towards the acceleration and enlargement of infrastructural development; this then triggers direct industrial growth, with attendant positive impact on inflationary trends, employment rate, per capita income and other growth indices.
Arguably, the RITC Scheme under review is a welcome introduction into our tax regime; aimed at enabling interested Participants better manage their tax obligations in such a way that guarantees an upward growth trajectory for profits, goodwill and corporate citizenship. Some of the more apparent improvements on previous tax relief systems include:
- Better articulated framework for the administration, implementation and control of a tax credit scheme, which specifically delineates the scope of power, authority and obligations of the different stakeholders and what their limitations are. There is clarity of purpose and vision.
- Characterization of tax credits obtained under the Scheme as tradable securities, which has never been an attribute of similar schemes in the past. This quality makes a tax credit a potential asset on a company’s balance sheet which could prove pivotal in balance sheet management.
- The absence of any limitation as to how long a tax credit may be utilized. In other words, a tax credit may continue to be carried forward until fully utilized by a Participant or Beneficiary.
- Ability of a Participant or Beneficiary to apply the tax credit secured to defray up to 100% of its company income tax payable in a year of assessment, if the tax credit was obtained in relation to a road infrastructure construction or refurbishment concerning an Economically Disadvantaged Area. This would otherwise not be available to a Participant or Beneficiary whose tax credit arose out of a road project constructed or refurbished in other areas.
- The Scheme is a specific road infrastructure tax credit initiative designed to consolidate expansion of road infrastructural development in Nigeria on a scale that has, perhaps, not been experienced before.
- There is clarity and no conflict with previous tax relief schemes. For example, the provisions of EO 7 of 2019 provides that “A participant entitled to a Road infrastructure tax credit on an eligible road shall not be entitled to claim any other tax credit, capital allowance, relief or incentive on the project cost incurred in respect of that eligible road project under any law in force in Nigeria, in addition to the Road Infrastructure tax credit”. The implication of this is that a Participant or Beneficiary of a RITC cannot claim any other infrastructural tax incentives existing under any law in Nigeria using the same Eligible Road Project.
- POTENTIAL CHALLENGES WITH THE SCHEME
Without question, the Scheme represents a bold step towards closing the road infrastructural gap in the country. However, we anticipate that its implementation would not be without some teething challenges, which, unless addressed, could limit the promise that it offers. The Committee may need to, through recommendations and proposed amendments to the President, secure clarity around some critical aspects of the Scheme. Some of the more topical areas have been discussed below:
- The definition of “Eligible Road” seems to be within the exclusive discretion of the Minister of Finance. Potential investors, participants and beneficiaries have no way of planning ahead or budgeting under the Scheme as they all have to await the pleasure of the Minister on the choice of roads to select for the purpose. Is the Scheme specifically for federal roads or are state roads also contemplated, given that states and local governments are also entitled to a share of company income tax revenue?
- Reckoning that road infrastructural development is usually a capital intensive exercise, chances are that companies may, from time to time, consider debt as an option for raising required funding in order to ultimately enjoy tax credits. There does not appear to be any consideration for borrowing and its related costs as a component of “Project Costs”. While it is arguable that the intention of the uplift (plus two (2) percent of the Project Cost) may be to compensate for borrowing cost or time value of money expended, suffice it to state that it may not sufficiently address the accruing costs on borrowed funds which apply on an ongoing basis. As presently constituted, potential investors may be circumspect about deploying debt as an option under the Scheme.
- It would appear that the life span of the Scheme is ten (10) years from the date of commencement of the EO7 of 2019 i.e. 25th January, 2019. Thus, the presumption is that Participants or Beneficiaries under the Scheme would cease to enjoy tax credits after 25th January, 2029 or thereabouts. If this is the intention of the Scheme that would mean that only companies that can complete their road infrastructure projects before that expiration date would be attracted to the Scheme. The question may arise; what would happen to uncompleted projects by that date or unutilized tax credits?
- In the event that a Project Cost is not approved, how will the associated costs be treated? In practice FIRS takes the rebuttable view that unapproved costs are also not allowable for tax purposes.
- While the Scheme may have provided for the procedure to be followed before tax credits can be issued, it has not taken care of what remedies are open to aggrieved participants or beneficiaries who, having satisfied all requirements for such issuance, are, nevertheless, denied tax credit certificates; or scenarios in which such tax certificates have been issued but are still not honoured by relevant agencies of government. The provision for arbitration in the Memorandum of Understanding may not be a one-size-fits-all resolution mechanism for disputes especially when the associated costs of arbitration are capable of eroding whatever gains may have been secured under the Scheme.
- The preparedness of the government of the day to respect the letters and spirit of the EO7 of 2019 as a veritable tool for re-energizing development of Nigeria’s road infrastructure assets is critical to the success of this intervention.
It is the expressed intention of the Federal Government of Nigeria to provide adequate facilities for the free mobility of people, goods and services throughout the federation, for the purpose of national integration and protecting the rights of citizens to engage in legitimate economic activities concerned with the production, distribution and exchange of wealth, goods and services. Thus, the establishment of this Scheme is a step in the right direction.
One of the critical success factors for any government policy is the political will to committedly honour the letters and spirit of the policy framework it has, itself, designed for execution. The absence of sincerity of purpose exhibited by some leaders in this respect has frequently led to policy summersaults or abandoned and uncompleted projects; or where completed, such projects have proven to be of substandard quality.
Many public utilities and industries, typically, perform below optimal efficiency and revenues levels owing to the stereotypical mindset that government resources belong to all and to no one in particular. In other words, there is a stark absence of ownership commitment in so far as government assets are concerned. It is in the light of this dismal performance of public sector-managed projects and services and the astronomically high cost of executing them, that it is always a breath of fresh air when government breaks from its stranglehold on construction of public/social infrastructure by inviting private sector partnership to deliver on socio-economic services that it has perennially failed in.
Typically, in PPP arrangements, the private partner is compensated through either: User-based payments (i.e., toll roads, airport or port charges), availability payments from the public authority [i.e., PFI] etc. or a combination of the above. In user-based payment structures, the government or public authority often needs to provide some financial support to the project to mitigate specific risks, such as demand risk, or to ensure that full cost recovery is compatible with affordability criteria and the public’s ability to pay. Government support mechanisms can take many forms, such as contributions, investments, guarantees and subsidies, but they should be carefully designed and implemented to allow for optimal risk allocation between the public and private sectors. When government support is present, the objective is to increase private capital mobilization per unit of public sector contribution.
It is the earnest expectation of the authors that government would continue to observe international best practices in partnering the private sector mindful of the imperative of using the Scheme to promote ease of doing business in Nigeria. The Scheme has not been conceptualized as a charity or philanthropic venture. On the contrary, it has been designed to directly profit Participants by improving their capacity to enhance value for their stakeholders.
If well managed, it could signpost a fresh beginning towards addressing the debilitating road infrastructure deficit apparent in every part of Nigeria. Early indications suggest that it may have begun to attract the interest of serious minded investors, who have the pedigree to take on gigantic projects and execute them with distinction. Government must continue to act consistently and with integrity in the implementation of the Scheme in order to gain and sustain the trust of the private sector even more.
THIS ARTICLE WAS JOINTLY AUTHORED BY SIMEON OYAKHILOME OKODUWA AND ROSE ADAJI, BOTH OF WHOM CARRY ON PRACTICE AT ALLIANCE LAW FIRM.
CONTRIBUTORS: CHISOM SAM-OBASI AND DOYIN FADARE
 Companies Income Tax Act; CAP C21, Laws of the Federation of Nigeria(LFN), 2004
 https://www.vanguardngr.com/2019/01/buhari-signs-executive-order-7-to-tackle-roads-infrastructure/ accessed on 11th February, 2019.
 Companies Income Tax Act, CAP C21 LFN, 2004
 Please see list of additional 27 industries/products granted pioneer status by the federal executive council on Wednesday, august 2, 2017 via https://www.vanguardngr.com/2017/08/fec-approves-27-new-industries-pioneer-status/ accessed on 15/2/2019.
 See section 40 of CITA
 See https://pwcnigeria.typepad.com/files/pwc-regulatory-alert_pioneer-status_august-2017.pdf accessed on 15/2/2019
 Section 34(1) , CITA
 Section 34(3), CITA
Victor Onyenkpa, Newsflash on The Companies Income Tax (Exemption Of Profits) Order, 2012 website
Exemption+Of+Profits+Order+2012 accessed on 11th February , 2019
 FG introduces infrastructure tax credit scheme through Road Trust Fund, [website] https://blog.deloitte.com.ng/fg-introduces-infrastructure-tax-credit-scheme-through-road-trust-fund/ accessed on February 11, 2019
 Lekan Paul. FG Establishes Presidential Infrastructure Development Fund, https://www.abusidiqu.com/fg-establishes-presidential-infrastructure-development-fund/ accessed on February 11, 2019
 See Paragraph 2, EO7 of 2019
 A “Participant” is defined under paragraph 5; EO7 of 2019 to include companies (other than corporate soles) registered under CAMA, a pool of companies under a Special Purpose Vehicle designated by SEC to operate under the Scheme and institutional investors registered as companies under CAMA.
 “Project Costs” are defined under paragraph 5; E07 of 2019 as any expenditure incurred by a participant for the construction or refurbishment of an eligible road but as certified by the Scheme’s management committee. In other words, the committee shall exercise a discretion as to what costs may be allowed as part of “Project Costs”.
 Pursuant to paragraph 5; EO7 of 2019 a “Beneficiary” means a company appointed by a Participant to utilize the whole or part of the road infrastructure tax credit initially issued to such a Participant under the Scheme or a person who has purchased the rights to utilize the said tax credit.
 See Paragraph 5; EO7 of 2019 where “Eligible Road” has been defined to mean a road approved by the President as eligible for the purpose of the Scheme upon recommendation by the Minister of Finance, which is subsequently notified to the participant and then published.
 See Paragraph 1; EO7 of 2019
 See note 13
 See Paragraph 3; E07 of 2019
 See note 15
 See note 16
 Section 40(12) CITA
 Pursuant to paragraph 5; EO7 of 2019 “Economically Disadvantaged Area” means an area in any geopolitical zone/state designated as “Economically Disadvantaged” by the President upon the advice of the Minister of Finance, who, for this purpose, shall have regard to matters including the average income level of the inhabitants vis-a-vis the minimum wage, the availability of infrastructure and volume of economic activity.
 See Paragraph 4(15) of E07 of 2019
 See note 19
 See note 14
 See Paragraph 1(3); EO7 of 2019
 Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme
https://pwcnigeria.typepad.com/files/pwc-tax-alert_road-infrastructure-development-scheme_jan2019.pdf accessed on February 11, 2019.
 See Recital to EO7 of 2019
 Aliyu Idris & Ors, Public Private Partnership in Nigeria and Improvement in Service Delivery: An appraisal; OSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 10, Issue 3 (Mar. – Apr. 2013), PP 63-71e- ISSN: 2279 – 0837, p-ISSN: 2279 – 0845. http://www.iosrjournals.org/iosr-jhss/papers/Vol10-issue3/L01036371.pdf