Proposed Tax Reforms Spark Worries In Varsities

The ongoing debate over Nigeria’s proposed tax reform bills has continued to spark widespread concern, particularly within the education sector.

The Academic Staff Union of Universities (ASUU) has raised alarms over two of the bills, warning that their passage could lead to a significant reduction in funding for the Tertiary Education Trust Fund (TETFund) and severely impact the nation’s universities.

As the national assembly deliberates on these reforms, ASUU and other stakeholders are urging the government to reconsider the proposals, which they believe could jeopardise the future of tertiary education in Nigeria.

The two bills which are part of a larger tax reform package transmitted by President Bola Ahmed Tinubu to the national assembly in September are causing widespread concern among educators and stakeholders in the sector.

The reform package includes the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.

While the bills aim to streamline the country’s tax system and improve fiscal management, it is the proposed reductions in TETFund’s revenue share that has raised the alarm.

Speaking on the bills, ASUU President, Professor Emmanuel Osodeke, warned that they would not only reduce the funding available to the Tertiary Education Trust Fund (TETFund), but could ultimately lead to its abolition.

This, he argued, would cripple Nigeria’s universities and other tertiary institutions, undermining the future of higher education in the country.

According to Osodeke, the government’s proposed tax reforms would reduce the percentage of taxes collected from corporations that currently goes to TETFund. Under the new plan, the rate would be slashed from 4 percent to just 2 percent by 2030.

The funds that would have gone to TETFund would instead be redirected to the Nigerian Education Loan Fund (NELFUND), which would provide loans to students for their education.

Osodeke decried this move, warning that it would diminish TETFund’s capacity to intervene in Nigerian universities and lead to the gradual winding down of the fund. “If we don’t work hard, we won’t be sitting here in the next six years.

“Nobody will be here in TETFund in the next six years,” he said.

He emphasised that the proposed changes could drastically reduce the funding that universities depend on to support infrastructure, research, and academic development.

LEADERSHIP report that TETFund has been a critical player in Nigerian higher education since its establishment in 1993. Initially formed as the Education Tax Fund, it was renamed in 2011 and became a vital source of financial support for public tertiary institutions across the country.

In recent years, TETFund has contributed billions of naira to the development of university infrastructure, research programs, and faculty development.

This year, the fund celebrated a historic milestone with a record-breaking N1.5 trillion in Education Tax collections for 2024, marking a significant increase attributed to the recent upward review of the Education Tax from 2.5% to 3%.

As the National Assembly prepares to deliberate on these crucial tax reform bills, ASUU and other education stakeholders are mobilising to ensure that the future of Nigeria’s tertiary education system is not jeopardised.

The union is urging the government to reconsider the proposed cuts to TETFund and to prioritize the long-term sustainability of the country’s educational institutions.

Other Unions such as the Colleges of Education Academic Staff Union (COEASU), have also condemned the bill, saying it would have negative impact on the education sector.