Minister of works, power and housing Babatunde Fashola, revealed this while addressing journalists after yesterday’s Federal Executive Council meeting chaired by President Muhammadu Buhari, at the presidential villa, Abuja Fasola was accompanied by the minister of labour and employment, Chris Ngige, and the attorney-general of the federation and minister of justice, Abubakar Malami, SAN.
According to Fashola, Dangote would build the federal government road using cement.
He pointed out that the arrangement was not only for Dangote, but for any company and organisation willing to make pre-approved investment in state-owned infrastructure.
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 remittances.”
He noted that companies were ordinarily supposed to pay income tax, but that there are existing policies in the country’s laws which enable government to consider and give tax incentives.
“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 economy 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 routes.”
He also said that it enables the government to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on that road for their livelihood would benefit from the road.
“It is important to stress that this is not a Dangote-only issue; it is an existing tax policy that a corporate body or individual that makes investment on the infrastructure of a public nature should be entitled to make claims for remission on its income tax obligation.”
He further explained that even as an individual one are entitled to make this claim if the infrastructure goes through this type of process and is approved by government.
“So, it is not a Dangote issue but an economic policy that will stimulate investment in infrastructure renewal or in any other area that government feels it needs private sector to complement its efforts in such area.
“So the details is about 30 per cent income tax obligation spread over time. It doesn’t mean they won’t pay tax; they will continue to pay their tax obligations but they will get remission for making this investment because, ultimately, the road doesn’t belong to them but to government and it is for the benefits of Nigerians. So it is like credit advance to government,” he stated.
On his part, Minister of Information, Lai Mohammed, lamented that the economy of the country is shrinking, as such the federal government cannot sustain the subsidy regime, hence the hike in the price of fuel.
Mohammed noted that, at times, government has to take very difficult and unpopular decisions, but which will benefit the country.
He said, “The current problem is not really about subsidy removal; it is that Nigeria is broke. Pure and simple!
“It is like somebody who has been earning N100,000 a month and he is faced with a situation where his employer says, ‘henceforth you will be earning N10,000 a month.’ He would need to make some very painful decisions and some very painful adjustments. That is the situation with Nigeria today.
“A few months ago, we were earning as much as $100 for every barrel of crude. In the months of February and March, we no longer have the resources, the foreign exchange to bring in refined fuel products. And our economy is shrinking.
“We appreciate the fact that the decision is going to affect everybody. We appreciate what we are going through, but Nigerians should also know that the government has the responsibility at times to take very difficult decisions. So, it is not always about popularity.”
Speaking on the planned strike by the Nigerian Labour Congress and other labour organisations over the increase in fuel pump price, labour and employment minister, Chris Ngige said that government was ready to discuss with all groups aggrieved over the new fuel price regime.
When asked why government was selective in its talks with labour groups, he replied, “We are trying to bring them under one roof on an issue that concerns all Nigeria.
“We wanted to speak to the sensitive sectors of the economy; that is why we brought them together.”
The labour minister noted that government was already taking steps to meet some of the demands put forward by Labour over the petrol price increase.
He said that a 15-man committee had been set up by government to look into such demands.
One of them, according to him, was the re-constitution of the board of the Petroleum Products Pricing Regulatory Agency (PPRA).
The board of the PPPRA, he disclosed, would be constituted in the next two weeks.