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Sunday, December 4, 2022

Tax For Infrastructure: NIQS Commends Buhari For Signing Executive Order 007

The Nigerian Institution of Quantity Surveyors (NIQS) has praised the Federal Government for signing the Executive Order No. 007 of 2019. The order has to do with Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.

The Executive Order number 007 is aimed at enabling private companies to build infrastructure such as roads in the country and be rewarded with tax credits in return and was signed by President Buhari on January 25.

The President, NIQS, Mr. Obafemi Onashile, in a chat with media men, said this initiative makes Nigeria the first country in Africa to look into providing critical infrastructure through the use of fiscal policy such as tax breaks, rather than the usual government direct funding or lease and concessional arrangement through the private sector.

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“The NIQS wishes to commend the President Muhammadu Buhari for this bold step and initiative which the NIQS had clamoured for in the past few years. This confirms that this government is listening and ready to think outside the box in finding workable solutions to infrastructure and housing problems in Nigeria,” he said.

Onashile, while commending the President Buhari for this bold step and initiative, said it represents what the NIQS had clamoured for in the past few years.

“This confirms that this government is listening and ready to think outside the box in finding workable solutions to Infrastructure and housing problems in Nigeria. This initiative could also make social housing provision easy, especially the multi-family type of housing.

However, to make the Order a success, Onashile charged the Federal Government to include quantity surveyors in the proposed management committee to be saddled with the responsibility of overseeing the implementation of the Order. He explained that the Quantity Surveyor, as financial, contractual and administrative experts in engineering infrastructure and construction projects, have a lot to contribute to its success.

“Members of the NIQS identify with the new and innovative project delivery method. The QS, being professionals focused mainly on finance and completion of projects only, with no conflict of interest in project designs or supervision, can surely bring a lot of expertise to bear in ensuring the success of the Order 7,” Onashile stated.

Consequently, the institution, he said, would like to enjoin the Minister of Finance to consider very importantly the inclusion of numerous quantity surveyors in the Management Committee as stipulated in the signed Order.

Expressing the institution’s concerns, the NIQS President said the body is concerned about getting professionals that would creditably monitor and verify the construction and the total development costs such that the country would not be shortchanged from its income that was being used on her behalf, just as it is worried about professionals that would set the cost yardsticks to be used to determine the volume of infrastructure a private company must deliver in a year to equate to pre-determined tax level.”This innovative Order while very good in principle could however fail due to many possible abuses and some lacunae that the NIQS has observed and which needed to be tightly closed from exploitation. Investor companies are to pay taxes yearly, so how is the quantum of the project delivered in year by an investor being equated to estimated tax liability for the year? If an investor company is not making sufficient financial injection into the project, how can this be quickly detected because the implication is that such company is not paying tax as and when due,” Onashile said.

He warned that infrastructure delivery contracts are peculiar and require certain basic components of construction procedures to assure a smooth administration that cannot be exploited to the detriment of the government. “It is not the typical “business contract of sale” that lawyers draw up. It requires construction law expertise – quantity surveyor,” he said.

The body urged the government to extend the Order on road infrastructure development and refurbishment investment tax credit scheme to the housing industry to close the gap in the sector.

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