The Nigerian Ministry of Education has announced ongoing amendments to the country’s proposed tax reform bills aimed at preserving the future of the Tertiary Education Trust Fund (TETFund) beyond 2030.
Nigeria’s Minister of Education Tunji Alausa, addressed the press in Abuja on Thursday, providing insights into the government’s proposed reforms for the education sector.
Earlier this year, President Bola Tinubu directed the National Assembly to review and pass four significant tax reform bills: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. However, one of the provisions within the Tax Administration Bill has raised concerns, as it suggests replacing the education tax with a “development levy,” which could threaten TETFund’s vital revenue stream.
TETFund has been a key player in funding infrastructure development across Nigeria’s public tertiary institutions for the past decade, largely relying on education tax, which is a percentage of taxable entities’ profits. The proposed development levy would be implemented in stages, starting at 4% for 2025 and 2026, followed by 3% for 2027 through 2029. According to the plan, 50% of the funds raised through the levy would be allocated to TETFund during the first two years, with its share rising to 66% in the subsequent three years. However, the proposal also states that TETFund’s share would end entirely by 2030, after which only a reduced 2% levy would fund the federal government’s student loan scheme.
This prospect of phasing out TETFund’s funding by 2030 has sparked strong criticism, with stakeholders expressing concerns that it could undermine the agency’s ability to continue supporting the infrastructure and research needs of Nigeria’s tertiary institutions.
At the ministerial briefing, Alausa reassured the public, clarifying that the education ministry is collaborating with the tax reform committee in the National Assembly to safeguard TETFund’s future. “You must have heard concerns about the new tax law and the possible phasing out of TETFund, as well as NASENI and NITDA,” he said. “I can now report that this will not be the case. TETFund will continue indefinitely. The legislators and the executive are working on several amendments to ensure that the education tax allocation to TETFund remains protected, and this also applies to NITDA and NASENI.”
Alausa confirmed that adjustments to the proposed tax law would ensure that the new development levy, while it replaces the education tax, will continue to allocate substantial funding to TETFund. “The percentage of the new development levy allocated to TETFund has been increased, ensuring the fund’s stability in the future,” he stated.
Established in 2011, TETFund is responsible for managing the disbursement of education tax collected from registered companies, which is remitted by the Federal Inland Revenue Service (FIRS). This funding has been crucial for infrastructure development, research, and training at public tertiary institutions across Nigeria.
