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By Gabriel Dike
The Federal Government on Wednesday disclosed that it has proposed an increment of 3 percent for Education Tax paid by companies operating in the country.
Currently, companies in Nigeria pay 2 percent of their profit to the Federal Inland Revenue Service (FIRS) as education tax and the amount collected is remitted to Tertiary Education Trust Fund (TEFund), which uses the money to execute projects in the 226 public tertiary institutions.
The TETFund chairman disclosed that the Federal Government has recommended an increase of 3 percent for education tax from the current two percent. He said the proposal was made by the minister of education and it requires the National Assembly to amend the Tertiary Education Trust Fund Act.
Meanwhile, the Tertiary Education Trust Fund has budgeted N500 billion for 2021 to execute projects in the 226 tertiary institutions nationwide.
Chairman of Board of Trustees of TETFund, Mr. Kashim Ibrahim Imam, dropped the hint in Lagos at the 2020 joint TETFund/FIRS interactive forum.
The event attracted the Rector, Yaba College of Technology (YABATECH), Mr. Obafemi Omokungbe, Provost of Federal College of Education (Technical), Akoka, Dr. Ademola Azeez, representatives of Vice Chancellors of University of Lagos, Lagos State University, Senate Ganiyu Solomon, representative of South West in TETFund, Mr. Femi Okeowo, Governing Council member, Federal University Oye-Ekiti, Ekiti State and top officials of Federal Inland Revenue Service.
Imam said: “We challenged FIRS to improve on the education tax collection in 2021. We have a benchmark of N500 billion as our budget in 2021. FIRS have accepted this challenge. We will work with FIRS to achieve the benchmark.
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“Our budget for this year is N277 billion. As at October, 2020 FIRS has collected N251 billion despite the COVID-19 pandemic that disrupted economic activities in the country. By the end of the year, FIRS will meet or surpass the target.”
He disclosed that there are over 10,000 projects funded by TETFund in the last nine years, adding” the partnership with FIRS is a marriage made in heaven. All the over 10,000 projects will not have been possible if not for FIRS”.
Imam lauded management and staff of FIRS, for being a worth ally through their enormous efforts in the collection of 2 percent education tax despite the numerous challenges in the economy.
In his address, the Executive Secretary of TETFund, Prof. Suleiman Bogoro, acknowledged a steady rise in education tax from 1999 to 2009 (N5 billion- 39 billion) and a decline in 2010 (89 billion)
“There was increase in education tax in 2011, 128 billion, and 2012, N188 billion, in 2013 the fund recorded an impressive collection of about N279 billion. From 2014 to date, education tax collection continued to fluctuate and decline.”
Prof. Bogoro acknowledged that the COVID-19 pandemic affected economic activities and is likely to have it tough on education, thus, it has become necessary to increase the drive for education tax collection.
He said in spite of the increasing number of beneficiary institutions and limited resources available for intervention; TETFund has performed in transforming tertiary education in the country.
In their testimonies, heads of their institutions in Lagos State, University of Lagos, Yaba College of Technology and Federal College of Education (Technical) acknowledge that TETFund has provided institutions with modern facilities to aid teaching, learning and research.
