The Federal Executive Council has approved the proposal for Dangote Group to construct Lokoja-Obajana-Ilorin road, the Minister of Power, Works and Housing, Babatunde Fashola, disclosed on Wednesday after Federal Executive Council.
According to Fashola, Dangote will hold back 30 per cent of his company’s income tax for years as a reprieve for the construction of the road.
The Obajana factory of Dangote Cement is situated along that axis.
The minister spoke to State House correspondents at the end of the FEC meeting presided over by President Muhammadu Buhari.
He spoke in company with the ministers of Information, Lai Mohammed; Labour, Chris Ngige and Justice and Attorney-General of the Federation, Abubakar Malami.
According to the Works minister, the memo was presented to Council for consideration and approval.
He said, “We presented a memo to council for consideration. The memo seeks to take benefits of the existing policy and regulation. It seeks to take benefits of tax policies, tax laws for the purpose of using them to drive infrastructure development renewal.
“So we presented a proposal by one of the subsidiary of Dangote Group, a construction company, for the construction of a section of Lokoja-Obajana-Kabba-Ilorin,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 remissions.
“Companies are ordinarily supposed to pay income tax, there are existing policies in our laws which enable government to consider and give tax incentives.”
He said further, “So Council considered and approved the proposal for Dangote Construction Company to build that section of the road because the tonnage of cement being produced from the factory has increased and the traffic in that area has increased, there has been unfortunate accidents also.
“So it is a total economic policy which Council considered and approved because it gives support to industry; it enables us take benefit of our tax law to renew infrastructure at a time where we are really challenged for resources to finance all our roads. It also enables us to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on the road for their livelihood would also benefit from the road.”
The minister however made it clear that the the policy was not just designed for Dangote, pointing out that there is an existing tax policy which allows corporate or individuals to make investment on the infrastructure of a public nature and later claim remission on its income tax obligation.
“Even as an individual, you are entitled to make this claim if the infrastructure goes through this type of process and is approved by government,”he said.
“So it is not a Dangote issue but an economic policy that is to stimulate investment in infrastructure renewal or in any other area that government feels it needs private sector to complement it’s efforts in such area.”
