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What the education tax is doing in Nigeria’s public tertiary institutions

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By Aisha Attahiru Jega

Some of the most prevalent challenges confronting public tertiary institutions in Nigeria are funding, management problems, obsolete equipment, poor learning facilities and infrastructure. Chief among these that deals the worst blow is funding. Most of the public tertiary institutions in the country are grossly underfunded. When there were just a few tertiary institutions, Government took up the burden of funding the institutions solely but from the mid 1980’s, there was a massive increase in the number of public tertiary institutions and in students’ enrolment in Nigeria. This increase got to the point where government openly acknowledged that it could no longer shoulder the responsibility of funding institutions alone. This led to the promulgation of the Education Tax Act No7 in January 1993, alongside other education-related Decrees. The Decree imposed a 2 per cent tax on the assessable profits of all companies in Nigeria which was earmarked to fund public tertiary institutions in the country.

The Education Trust Fund (ETF), now Tertiary Education Trust Fund Act (replaced in 2011), is an intervention agency set up to provide supplementary support to all levels of public tertiary institutions, with the main objective of using funding alongside project management for the rehabilitation, restoration and consolidation of Tertiary Education in Nigeria. Initially the Education Tax Act No7 of 1993 mandated the Fund to operate as an Intervention Fund to all levels of public education (Federal, State and Local).

The Federal Inland Revenue Service (FIRS) is today empowered by the Education Act to assess and collect Education Tax. The Tertiary Education Trust Fund (TETFUND) also known as ‘The Fund’ administers the tax imposed by the Act, and disburses the amounts to educational institutions at Federal, State and Local Government levels. It also monitors the projects executed with the funds allocated to beneficiaries. The distribution for tertiary education is shared between Universities, Polytechnics and Colleges of Education in the ratio of 2:1:1. The 1998 amendment changed the disbursement to 50 per  cent (Tertiary education); 25 per cent (polytechnics) and 25 per cent (Colleges of Education) with emphasis placed on science and technology due to the expensive nature of training within the country.

The Fund is managed by an 11 member Board of Trustees with members drawn from the six geo-political zones of the country, as well as representatives of the Federal Ministry of Education, Federal Ministry of Finance and the Federal Inland Revenue Service. It is disbursed for the general improvement of education in federal and state tertiary education institutions, in form of annual and special interventions specifically for the provision and/or maintenance of: Essential physical infrastructure for teaching and learning, institutional materials and equipment, research and publications, academic staff training and development and, any other need which, in the opinion of the Board of Trustees, is critical and essential for the improvement and maintenance of standards in the higher educational institutions.

So far, what has the Education Tax done for Nigeria?

Tertiary education tax is imposed on every Nigerian company at the rate of 2.5 per cent (as amended in the 2021 Finance Act) of the assessable profit for each year of assessment. The tax is payable within two months of an assessment notice from the FIRS. In practice, many companies pay the tax on a self-assessment basis along with their Companies Income Tax. Failure to pay education tax comes with a penalty. For a first offence, the fine is N10,000 or imprisonment for a term of three years while for a second or subsequent offence, the fine is N20,000 or imprisonment for a term of five years or it could be both fine and imprisonment.

From 1998-2018, a total of about N1 trillion was disbursed by TETFUND to universities, polytechnics and colleges of education, and as of 2021, 221 institutions were beneficiaries of the fund including 87 universities, 65 Polytechnics, and 69 Colleges of Education. The fund has been used to cater for interventions such as physical development in public tertiary institutions, including construction of physical infrastructure like lecture halls and theatres, laboratories, construction of libraries and academic and non-academic staff offices, procurement of equipment and furniture, procurement of hard and soft copies of books and academic journals, as well as ICT software services/licenses.

Another intervention scheme funded by education tax is library development in tertiary institutions. This is done through the provision of library equipment and e-learning facilities. The fund is also used to support authorship of relevant indigenous academic textbooks for teaching and learning in tertiary institutions and the establishment of 7 academic publishing centers and funding the publishing of academic research journals. Part of the fund is set aside and used to offer Academic staff in Nigerian public tertiary institutions study fellowships, to undertake masters and doctorate degrees. There is also the National Research Fund (NRF) a non-infrastructural special intervention that is aimed at promoting the conduct of applied research and innovation by academics, in public tertiary institutions which focuses on Science, Engineering, Technology and Innovation, Humanities and Social Sciences. As at 2020, the NRF funded 457 projects and this dates back to its inception.

It is a known fact that the foundation of education is frail when education is not well funded, and the products of such foundation are weak intellectuals. The Education Tax has impacted positively in Nigeria’s educational development with particular focus on public tertiary institutions. It is no gainsaying that without the Education Tax, earmarked for the transformation of education in Nigeria, the nation’s public tertiary institutions would be a backwater compared to its counterparts in other climes. It is not surprising however, that there is the conspicuous stamp of ‘TETFUND’ on most of the infrastructure in our public tertiary institutions today, and this is courtesy of the taxes we pay.

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Lagos announces 40% rebate on payment of planning permits, duties

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…grants 90-Day amnesty for property owners to perfect papers

In a bid to ensure that the State maintains its high developmental standard, the Lagos State Government has announced a 40 per cent rebate on Planning Permit payments to Lagosians.

Speaking at a press briefing on Wednesday organised to mark the first year, second term in office of Governor Sanwo-Olu at the Bagauda Kaltho Press Centre, the Secretariat, Alausa, Ikeja, the Commissioner for Physical Planning and Urban Development, Dr Oluyinka Olumide noted that the initiative is to encourage property owners in the State to do the right thing by ensuring their properties pass all official procedures.

He also noted that Mr Governor has graciously granted a 90-day amnesty period to owners/developers of existing property to regularise their property and help in promoting a sustainable physical environment.

Dr, Olumide disclosed that the Amnesty initiative would allow owners and developers of existing buildings to obtain planning permits without the payment of statutory penal fees within the amnesty window from May 2 to July 30, 2024, with a 5% discount applicable to payments completed within 10 working days of the bill’s issuance.

He described the incentives, that is the rebate to civil servants and the Amnesty Programme, as a relief measure to mitigate the effects of the current economic hardship being experienced in the built environment, adding that applicants are expected to submit all relevant documents for assessment through the LASPPPA  Head Office and District Offices in the 57 Local Government Areas and Local Council Development Areas.

In his words, “Mr Babajide Olusola Sanwo-Olu-led administration is not leaving any stone unturned in bequeathing a Lagos Smart City that is premised on a sustainable functional Physical Environment, achievable only by wholesale compliance with regulatory requirements.”

“The administration which is people-oriented and compassionate in formulating policies that favour inclusiveness, ease of compliance and citizens’ participation has given the 40 per cent rebate in planning permit for Civil Servants to get more and more of them to experience the process and become wilful advocates of the good works of the government in the sector and also the Amnesty Window of three months that we just opened last week to allow planning permit applications from owners of existing developments without payment of the statutory penalty is a good case in point.”

“For emphasis, the window opens from May 2nd to July 30th, 2024, when the waiver on penalty payments on existing developments shall subsist”, he added.

The Commissioner, while appreciating Mr Governor on the gesture, warned that non-compliance would draw the wrath of the government that is determined to do good for the largest number of Lagosians.

He stated that the administration would not compromise the safety of every individual in the State.

According to him, “I hereby solicit the continued cooperation of the general public to adhere strictly to the Physical Planning Laws of Lagos State by following the standard steps to the planning and construction of buildings to promote safety and orderly, livable, and sustainable environment for the wellness and wellbeing of the people.”

“Mr Babajide Sanwo-Olu has charged every officer under this responsibility to take the life of every Lagosian as important as theirs and be steadfast in discharging their duties to ensure no further collapse of buildings, neither should there be the loss of any life. With this rebate and after the 90-Day Amnesty, any property that falls on the wrong side of physical planning laws shall face the consequences squarely”, he stressed.

The Commissioner also highlighted some of the activities embarked upon by the Office of Physical Planning including the over 74% rate in the grant of Planning Permits in the last year and the preparation and review of Master Plans and Model City Plans such as the Lagos Island Model City Plan and Alimosho Model City Plan.

Others are the preparation of nine Action Area Plans, nine Development Guide Plans and the delivery of the right of way for 16 public infrastructure projects in the State.

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Senate considers bill on unemployment benefit scheme

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The Senate passed a bill seeking the establishment of a National Internship and Unemployment Benefit Scheme on Wednesday.

The bill was considered and passed for a second reading after a presentation by its sponsor, Senator Shuaib Salisu (APC, Ogun Central), who explained that the piece of legislation, aims to offer unemployed graduates in Nigeria some part-time jobs where they could gain experience and earn stipends.

Senator Salisu added that the bill intends to create a database of unemployed Nigerian youths, particularly graduates, with their respective disciplines and also establish a framework that will guide the provision of part-time jobs for youths while they search for full-time jobs.

According to him, the scheme, when established, would provide hope for graduates and allow them to acquire experience before they secure full-time employment.

He argued that the scheme would help address insecurity and criminal activities that arose from unemployment.

The lawmaker also acknowledged existing agencies such as the National Directorate of Employment, NDE and the Industrial Trust Fund, ITF, but noted that they have not been targeted adequately to the beneficiaries.

Senator Salisu believes that the scheme, which will have a database, will be more effective in streamlining interventions for the beneficiaries.

Though many of the senators who contributed supported the proposed legislation, Senator Ahmed Wadada (SDP, Nasarawa West), argued that the bill may not be the solution needed to tackle unemployment.

But Senator Wadada said the focus should be on creating an enabling environment for the private sector to thrive and consequently create jobs, not thinking of benefits for the unemployed.

“If the environment is enabling enough to up to 10 Dangotes, the rate of unemployment will be reduced to the barest minimum. The emphasis at all times should be to create the needed enabling environment,” he said.

After passage for a second reading, the Senate President, Senator Godswill Akpabio, mandated the Senate Committee on Labour and Productivity to give it more legislative inputs and report back within four weeks.

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Gov. Abiodun calls for creation of Ogun Division of Court of Appeal

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Gov. Dapo Abiodun of Ogun on Wednesday in Abeokuta called for the creation of the Ogun Division of the Court of Appeal to aid quick dispensation of justice in the state.

Abiodun, while receiving the President of the Court of Appeal, Justice Monica Dongban-Mensem, noted that this would ease the workload of judges in the Ibadan Division of the Court.

He commended the Appeal Court President for working tirelessly to ensure appeals were quickly taken care of in all the Court’s divisions through her “decongestion initiative”.

“This will lead to an efficient justice delivery system in the country as justice delayed is justice denied,” the governor said.

Abiodun explained that his administration had carried out several reforms aimed at repositioning the justice system in Ogun.

He appreciated members of the state judiciary led by Justice Mosunmola Dipeolu for their support, especially in setting up the special court handling cultism-related cases.

Earlier, Justice Dongban-Mensem had said her visit to the Ibadan Division was to decongest appeal cases that had been held up due to lack of time.

”This was occasioned by election and commercial appeals,” she said.

Dongban-Mensem disclosed that Ibadan Division had one of the highest workloads of all the divisions of the Court of Appeal.

”This was made worse by the depletion of judges as a result of posting, promotion, retirement or death.

“It is even regrettable that the Ibadan Division, which was two divisions in the past, was reduced to one, leading to the current workload.

”But I assure that something will be done to address the imbalance,” the Appeal Court President said.

She commended the Abiodun-led administration for the transformation taking place in Ogun and for carrying the state judiciary along in the scheme of things.

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