Apparently determined to attract private investments into the state’s infrastructure sector, the Edo State Governor, Godwin Obaseki, has signed the Infrastructure Development and Social Investment Tax Credit Scheme Order 2021.
The Order signed by the governor on 11 May 2021 introduces the Infrastructure Development and Social Investment Tax Credit Scheme, a public-private partnership (PPP) arrangement that enables the state government to use private sector funding of key infrastructure and social projects.
According to the investment prerequisites stipulated in the Order, any private sector player who invest in eligible infrastructure and social projects shall be entitled to recover investments costs by way of an Infrastructure and Social Investment Tax Credit Certificate (“ISITCC” or “the Certificate”) issued by the state government.
The ISITCC shall be a negotiable instrument claimable against Personal Income Tax (PIT) and Withholding Tax (WHT) payable to the state government.
The Order further indicates that the value of the ISITCC issued to investors shall be the summation of total investment costs and an uplift equivalent to the Central Bank of Nigeria’s Monetary Policy Rate plus five per cent (5%).
The implementation and administration of the Scheme, which will run for five years, shall be carried out by the Infrastructure Development and Social Investment Tax Credit Scheme Management Committee.
According to the Order, the Committee, which is charged with among other responsibilities to recommend for designation, projects eligible under the Scheme, will be chaired by the Edo State Commissioner for Finance and will have as members, the Chairman of Edo State Internal Revenue Service, the Permanent Secretary of the State Ministry of Finance and representatives of the private sector.
The Edo State Government Order 2021 is a sub-national level replication of the Federal Government’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme introduced in 2019, which offers tax credits in exchange for investment in roads.