The education ministry says there are ongoing amendments to Nigeria’s proposed tax reform bills to preserve the Tertiary Education Trust Fund (TETFund) beyond 2030.
Tunji Alausa, the minister of education, briefed the press in Abuja on Thursday about the federal government’s planned reform for the sector.
In October, President Bola Tinubu asked the national assembly to consider and pass four tax reform bills.
The bills include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
A part of the tax administration bill proposes eliminating the education tax, to be replaced by a “development levy”.
This would effectively disrupt the revenue stream of TETFund, an agency that has significantly funded infrastructure development in Nigeria’s public tertiary institutions over the last decade.
The proposed development levy in the tax bill is to be amassed in phases, starting at 4 per cent payable by taxable entities for 2025/2026 and then 3 per cent for 2027, 2028, and 2029.
Based on the proposed bill, about 50 per cent of the monies accruing to the levy would go to TETFund in 2025 and 2026.
TETFund’s share would be upped to 66 per cent in 2027, 2028, and 2029.
Then, the agency would cease to get any revenue from 2030.
From 2030, the development levy would decrease to 2 per cent, solely meant to fund the federal government’s student loan scheme.
However, this plan was heavily criticised by stakeholders as an attempt to scuttle TETFund and commodify education.
At the ministerial briefing, Alausa addressed the prior lack of clarity around what would be the fate of TETFund if the tax bills sail.
He said the education ministry is working with the tax reform committee at the national assembly to preserve TETFund’s revenue source.
“You must have heard some information about the new tax law about the phasing out of TETFund by 2030, as well as NASENI and NITDA. We’ve worked with the tax reform committee at the national assembly,” the minister said.
“We can report to you now that this is not going to be the case. TETFund will continue into eternity. The legislators and the executive are working on various amendments to the tax law.
“By the time the final document is passed, the education tax monies to TETFund will be protected, even to NITDA and NASENI. I can assure you that the percentage of the new development tax levy has been increased.”
Established in 2011, TETFund monitors the disbursement of education tax to public tertiary institutions in Nigeria.
This education fund was, for over a decade, driven by a two and later three per cent deduction from the assessable profit of registered companies.
It is collected by the Federal Inland Revenue Service (FIRS) and annually remitted to TETFund for infrastructure, research, and training in public tertiary institutions.
