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FG introduces infrastructure tax credit scheme through road trust fund

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The Federal Executive Council at its meeting on Thursday, 26 October 2017, approved the establishment of Road Trust Fund (RTF or the Scheme). RTF is conceptualized as a public private partnership (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 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.

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Unlike ITR, RTF will operate under a collective model to mobilize private capital from companies which will be used to undertake road projects through stand-alone collective infrastructure funds using a special purpose vehicle. It will also involve financial intermediaries who are expected to promote RTF Projects and solicit for funds from interested companies. The design and cost of the roads will be approved by the FMPWH and also certified by the Bureau of Public Procurement (BPP).

Expected benefits for companies who take 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 Scheme to the Federal Government and country include:

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  • 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

Although, it is clear that the objective of the Federal Government is to reduce budgetary pressures by increasing private partnership in the development of road infrastructure, a number of details regarding how the Scheme will be implemented needs to be clearly spelt out.  For instance, it is unclear how long the Scheme will be available, how this will affect roads owned by State Governments and what will happen where a company’s tax payable for the three-year period is lower than the cost contributed to the fund or amount recoverable. Therefore, efforts must be channeled toward ensuring that the details, expectations and benefits of the Scheme are clearly documented to ensure transparency and prevent abuse. In this regard, the FMF is expected to release a detailed guideline on the new Scheme within the next 30 days.

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Visit our blog to keep yourself abreast of business alerts, subject matter expert perspectives and so on. This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication.

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Corporate Press Releases

Customers to win salary-4-life, business grants, rent advance and cash rewards in Diamondxtra quarterly draw

The DiamondXtra Reward Scheme is the most rewarding way to save.

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Access Bank, Scam Alert: Access Bank issues warning to customers over fraudulent acts , Director, West Africa region, IE, Onyekachi Eke, Access Bank lists N30 billion bonds on NSE , Access Bank, Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc, Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc, A new BVN guideline to curb e-fraud is coming soon - CBN announces , Access Bank donates 66 laptops to children in underserved communities, Access Bank postpones closed period for 2019 Year-End financial statement, Access Bank dispels rumour about its CEO being arrested, Access Bank set to establish subsidiary in Cameroon after acquiring Kenyan bank, Access Bank finally acquires Kenyan bank, Transnational Bank Plc, Herbert Wigwe: We are clamping down on malaria with the Malaria-To-Zero Initiative, Access Bank to list N15 billion green bond on Luxembourg Stock Exchange 

Leading retail bank in Nigeria, Access Bank Plc is set to reward more than 1,000 DiamondXtra customers with various grants and cash prizes in the second DiamondXtra quarterly draw of Season 12 scheduled to hold on Wednesday, July 15, 2020.

According to Adaeze Umeh, Head, Consumer Banking, Access Bank Plc, “We are gearing up for the DiamondXtra quarterly draw this month and we will be rewarding more than 1,000 lucky customers with various cash prizes, business grants, family health insurance, rent advance and other exciting rewards. It is the bank’s little way of rewarding its loyal customers and creating more value to meet customer needs during these trying times.  We rewarded ten customers last month with N1million each at the monthly draw and we are here again to reward more customers in the quarterly draw.”

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To join the winning train, all you need to do is keep saving if you have a DiamondXtra account already. “If you don’t have an existing account, simply dial *901*5# to open a DiamondXtra account with just N5, 000 and save multiples of ₦5,000 to increase your chances of winning,” Adaeze told newsmen in Lagos.

Some of the DiamondXtra rewards for the quarterly draw include:

  • Salary4Life (N100,000 every month for 20 Years)
  • Rent for a Year for 21 lucky customers
  • One Year Family health coverage for 7 lucky customers
  • N1Million business grant for 6 lucky customers
  • ₦500,000 for 15 lucky customers
  • ₦100,000 for 45 lucky customers
  • ₦50,000 for 300 lucky customers
  • ₦20,000 for 300 lucky customers
  • ₦10,000 for 300 lucky customers

The DiamondXtra Reward Scheme is the most rewarding way to save, don’t miss out on this opportunity to become a millionaire or a star prize winner.  To participate; simply open a DiamondXtra account, save in multiples of ₦5,000 and you stand the chance to win amazing prizes in the quarterly draw this month.

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Hospitality & Travel

FG bars aides of VIPs from airport terminals, to grant loans to airlines, others at 5%

The minister insisted that face masks must be worn at all times inside the airport and airplane.

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has barred all non-travelling aides of public office holders and very important personalities (VIPs) from gaining access into the Airport terminal. 

This is part of the measure and aviation protocol designed to contain the spread of the coronavirus disease and ensure safety of the passengers and workers in the aviation sector. 

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This was disclosed by the Minister of Aviation, Hadi Sirika, during Monday’s briefing of the Presidential Task Force (PTF) on COVID-19. 

Sirika said that this measure applies especially to Governors, Ministers, National Assembly Members, Judicial officers and Military officers as the practice of having their Personal Assistants and Special Assistants, who they insist on seeing them off up to the aircraft though not travelling with them, would be stopped. 

The Aviation Minister in his statement said, ‘’Henceforth, all VIPs will no longer be permitted to bring non-travelling aides into the Airport Terminals. This especially applies to Governors, Ministers, NASS members, Judiciary and Military officers.’’ 

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While speaking on the new procedures during this COVID-19 era, the minister said that mandatory temperature and symptoms checks will be carried out at the airport terminals and frequent washing of hands should be done at the airports. He also said that face masks must be worn at all times inside the airport and airplane and anyone who does not do that will not be allowed inside the airport terminals. 

He pointed out that physical distancing will be maintained at all times just as unruly passengers will not be allowed to board the aircrafts or fly as no pilot will be allowed to fly a plane carrying an unruly passenger. 

He revealed that the processes of compression, heating, cooling and filtration that aircraft cabin air is subjected to, takes out 99.9% of all organisms including viruses etc. that’s why cabin air is safer than most other environments.  

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The aviation minister also stated that operators in the aviation sector including airlinesground handling firms and others, will be given loan at 5% interest rate with effect from 2021. He, however, noted that the modalities for the loan is being worked out with the Central Bank of Nigeria and the Federal Ministry of Finance, Budget and National Planning 

It can be recalled that Sirika stated this in an interactive session with the senate committee on Aviation where he said that any VIP coming into the airport this time around as a personality, minister or even members of the national assembly will not be carrying their aides into the airports anymore. 

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Appointments

Vodacom Nigeria gets new MD

Vodacom Business is a leading pan-African telecommunications provider wholly-owned by the Vodacom Group.

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Vodacom Nigeria gets new MD

Vodacom Business (Nigeria) Limited has appointed Mr Valentine Chime as the Managing Director of its operations. According to a statement from the company on Monday, the appointment is at the instance of the board of directors.

He will now drive the company’s vision of becoming Africa’s leading cloud and digital service provider, the statement read.

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Prior to this appointment, Valentine Chime was with Aruwa Capital, a private equity company investing across West Africa. He also worked at Kaizen Venture Partners, a private equity company focused on distressed assets. He has held various C-suite positions in a number of portfolio companies in different sectors.

READ ALSO: Africa seeking extra $44 billion to deal with COVID-19 pandemic

Chime expressed his enthusiasm to take up the position and challenge of building the Vodacom brand in the country. He said:

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“Vodacom Business Africa (Nigeria) Limited is well-known and very respected in the industry, and I look forward to taking up this mission.

“Covid-19 has accelerated digital transformation, and we are perfectly positioned to deliver intelligent connectivity through seamless delivery of cloud and digital services and technologies to our clients.”

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Vodacom Business is a wholly-owned subsidiary of the Vodacom Group, and a leading pan-African telecommunications provider that came into Africa since 1992.

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