Nigeria’s tax reform bills propose the phasing out of special tax privileges for TETFUND, NASENI, and NITDF by 2029, redirecting funds to the Student Loan Fund. Critics warn this will impact educational and scientific infrastructure. The proposed changes face significant opposition across Nigeria’s political landscape.
In a bid to overhaul Nigeria's tax system, the proposed tax reform bills have sparked controversy, particularly with their impact on funding for educational and scientific initiatives. The bills, championed by President Bola Tinubu, are pushing for a significant restructuring of the country’s tax laws, but they face substantial opposition, especially from the northern regions.
A key aspect of the debate centers on the proposed alterations to the special tax privileges enjoyed by institutions like the National Information Technology Development Fund (NITDF), the National Agency for Science and Engineering Infrastructure (NASENI), and the Tertiary Education Trust Fund (TETFUND). While the details of the VAT sharing formula have dominated the discussion, other crucial issues regarding the restructuring of these funds have not received as much attention.
Under the proposed reforms, the current tax rates that support these agencies would be phased out. The NITDF currently levies 1% of the profit before tax of companies earning over N100 million. Similarly, NASENI receives a 0.25% levy from commercial companies in sectors like banking, telecommunications, and oil. TETFUND, which plays a significant role in funding public tertiary education, currently collects a 3% tax from companies' assessable profits.
By 2029, these special tax privileges will expire, and the proposal seeks to consolidate all educational and developmental levies into a single 4% tax, which will decrease over time, eventually ceasing by 2030. This would significantly reduce the financial support available to TETFUND, which received over N800 billion in the 2024 budget for infrastructure and lecturer training.
In contrast, the Student Loan Fund, which has been proposed as the primary beneficiary of this restructuring, will start receiving a growing share of the tax levies, reaching 100% by 2030. While some government officials insist that the reforms won’t eliminate these agencies, critics, including Governor Babagana Zulum of Borno State, argue that the changes could effectively diminish their roles.
The reforms are part of a broader push by the government to diversify funding for education and infrastructure. However, the proposed cuts to TETFUND and the exclusion of NASENI and NITDF from future levies have raised concerns among educational and scientific stakeholders, who warn that the changes could have long-term implications for Nigeria's educational and technological development.
