FG discontinues road tax credits, says projects must follow appropriation

FG Ends Use of Road Tax Credits by Caleb Obiowo February 5, 2026

The Federal Government has discontinued the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, which allowed companies to build and rehabilitate federal roads and then use those costs to reduce their corporate tax payments. 

Reason: Constitutional and Financial Rules

Mr. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), explained that the scheme conflicted with constitutional tax administration. Under the constitution, the revenue agency can assess, collect, and account for taxes but cannot make appropriations for infrastructure without legislative approval. Therefore, funding road projects through tax credits bypassed the approved budgetary process. 

Return to Formal Appropriation

Going forward, all federal road projects must be funded through the formal appropriation process meaning they must be approved in the national budget by the executive and legislature before funds are released. 

Background and Impact

The tax credit scheme had been running since about 2019 and was meant to last a decade, but is now stopped early. 

Major firms like Dangote Group, MTN Nigeria, NLNG, Access Bank, and others had participated, funding projects in exchange for future tax relief. 

Past contributions from the Nigerian National Petroleum Company (NNPC) under the scheme stopped in 2025, leaving an estimated ₦3 trillion worth of projects without clear funding before this policy shift.  What This Means for Roads

Road construction and rehabilitation will now depend on central budget allocations subject to the regular legislative oversight and appropriation process. 

The government is expected to explore other funding options, such as Public-Private Partnerships (PPPs), to ensure critical routes are built or completed.