In return, the government will forgo 30 per cent of Dangote company's income tax for some years.
The Minister of Power, Works and Housing, Babatunde Fashola disclosed this while briefing newsmen after the FEC meeting in Abuja on Wednesday, May 18.
He said in return, the government will forgo 30 per cent of Dangote company's income tax for some years.
"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 road.
"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,’’ Fashola said.
"Companies are ordinarily supposed to pay income tax, but there are existing policies in the nation’s laws which enable government to consider and give taxes incentives.
"So Council consider 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 had 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 we are really challenged for resources to finance all our routes. It also enables us to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on that road for their livelihood would also benefit from the road,” the minister stated.
According to him, the company will still continue to pay tax but would get remission for the investment.
"So, the detail 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 obligation but they will get remission for making this investment because ultimately the road doesn't belong to them but to government and is for the benefits of Nigerians.
"So, is like credit advance to government,’’ he said.
Fashola was accompanied by the Ministers of Information, Lai Mohammed; Labour, Chris Ngige and Justice and Attorney-General of the Federation, Abubakar Malami, to brief journalists on the outcome of the meeting.