Proposed tax reform bills in the National Assembly could significantly alter the funding structure for Nigeria’s tertiary institutions, according to a review by DAILY POST.
President Bola Tinubu has championed these bills as part of his administration’s efforts to overhaul the nation’s tax laws. However, the proposals have encountered strong resistance, particularly from northern lawmakers and stakeholders outside the National Assembly.
While much of the debate has centered on the proposed value-added tax (VAT) sharing formula, other critical aspects of the bills have received less attention. Notably, the reforms aim to review the special tax privileges currently granted to three key agencies: the National Information Technology Development Fund (NITDF), the National Agency for Science and Engineering Infrastructure (NASENI), and the Tertiary Education Trust Fund (TETFUND).
Key Proposals
The bills propose a phased removal of dedicated levies funding these agencies, with significant implications for their operations:
NITDF Levy: Currently set at 1% of the profit before tax (PBT) for companies earning over ₦100 million.
NASENI Levy: Charged at 0.25% of PBT for companies in sectors such as banking, ICT, telecommunications, aviation, and oil and gas.
TETFUND Tax: Calculated as 3% of assessable profits of Nigerian-registered companies.
Under the proposed reforms, these levies will be consolidated into a single development levy of 4% on eligible companies’ profits from 2025 to 2026. The rate will reduce to 2% between 2027 and 2029, and the levies will be phased out entirely by 2030.
Redistribution of Funds
The Student Loan Fund stands to gain the most from the reforms:
From 2025 to 2026, 25% of the development levy will be allocated to the Student Loan Fund, increasing to 33% between 2027 and 2029. By 2030, the fund will receive 100% of the levy.
TETFUND will initially receive 50% of the levy in 2025 and 2026, rising to 66% from 2027 to 2029, but its allocation will drop to 0% by 2030.
NITDF and NASENI will be excluded from the levy by 2027.
Implications for TETFUND
TETFUND, which is responsible for infrastructure development and staff training in public tertiary institutions, received over ₦800 billion in the 2024 budget. The proposed changes could severely impact its funding.
Governor Babagana Zulum of Borno State recently expressed concerns, claiming the bills would effectively dismantle the three agencies. However, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Reforms, and the Federal Inland Revenue Service (FIRS) Chairman have refuted these claims. They insist the agencies will remain functional but will transition to direct government funding rather than relying on statutory transfers.
If passed, the bills would represent a significant shift in Nigeria’s approach to funding education and development, sparking debates about their long-term impact on the country’s infrastructure and human capital development.
