The tax reform bills currently before the National Assembly propose significant changes that could impact the funding of tertiary institutions in Nigeria. These bills, backed by President Bola Tinubu, aim to overhaul the country’s tax system but have sparked widespread opposition, particularly from the northern region and within the National Assembly itself.
While much attention has focused on the proposed changes to the VAT sharing formula, other important issues within the bills have been less discussed. A review reveals that the reforms seek to amend the special tax privileges granted to the National Information Technology Development Fund (NITDF), the National Agency for Science and Engineering Infrastructure (NASENI) Fund, and the Tertiary Education Trust Fund (TETFUND). Under the new proposals, all education development funds would be channelled to the Student Loan Fund.
The bills propose a gradual removal of the taxes that currently fund these agencies. For example, the NITDF levy, which is 1% of the profit before tax of companies earning over ₦100 million, would be phased out. Similarly, NASENI, which receives 0.25% of the profits before tax from certain industries, and TETFUND, which collects 3% of assessable profits from registered companies, would also lose their dedicated funding streams. The proposals set 2029 as the final year for these levies.
A new system is proposed under Section 59 of the Nigerian Tax Bill. It consolidates all development levies into a single 4% levy on the profits of eligible companies for 2025 and 2026. This rate would drop to 2% from 2027 to 2029, after which the levies would be discontinued entirely by 2030. The sharing formula under the new system gives TETFUND 50% of the levy from 2025 to 2026, increasing to 66% from 2027 to 2029, before reducing to zero in 2030. Meanwhile, the Student Loan Fund is set to receive 25% of the levy initially, rising to 33% between 2027 and 2029, and then 100% from 2030 onward. By 2027, NITDF and NASENI will no longer receive any portion of the development levy.
These changes would significantly affect TETFUND, which received over ₦800 billion in the 2024 budget and plays a critical role in building infrastructure in public tertiary institutions and training lecturers.
On Sunday, Borno State Governor Babagana Zulum voiced his concerns, suggesting that the bills aim to dismantle these three agencies. However, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Reforms, and the Federal Inland Revenue Service (FIRS) Chairman, Zaccheus Adelabu Adedeji, have dismissed these claims.
They clarified that the agencies will not be scrapped but will instead receive direct funding from the government rather than relying on statutory transfers.
