Tax reform: Senate plans review as Customs, ASUU fault provisions

The Academic Staff Union of Universities, on Tuesday, warned against the proposed withdrawal of the education tax to the Tertiary Education Trust Fund as contained in the tax reform bills currently undergoing public hearing at the National Assembly.

The President of the union, Prof Emmanuel Osodeke, said the scrapping of TETFund could lead to the collapse of tertiary education in the country.

He stated this while delivering a memorandum on the tax reform bills during his appearance at a public hearing organised by the Senate Committee on Finance.

According to him, ASUU is against the proposed abrogation of education tax, saying it “Poses serious threats to the survival of TETFund,” and urged the National Assembly to protect the fund.

“From any objective assessment, TETFund has been the backbone for infrastructural development, postgraduate training and research capacity building in Nigeria’s public tertiary institutions in the last one-and-half decades.

“Over 90 per cent of capital projects in State and Federal Colleges of Education, Polytechnics and Universities during this period were TETFund-sponsored. The intervention agency has also remained the primary source of higher degree training for young academics and support staff since 2011 when the Act establishing the Education Tax Fund was re-oriented to its original intendment of an intervention agency for the development of tertiary institutions in Nigeria.

“ASUU is seriously worried that the education tax, called development levy, used to bankroll TETFund’s programmes is about to be ceded to the newly established Nigerian Education Loan Fund,” he said.

According to Prof Osodeke, Section 59(3) of the Nigeria Tax Bill 2024 states that only 50 per cent of the development levy would be made available to TETFund in 2025 and 2026 while the Nigerian Infrastructural Technology Development Agency, National Agency for Science and Engineering Infrastructure would share the remaining percentages.

The bill proposed that “TETFund will also receive 66.7 per cent in 2027, 2028 and 2029 years of assessment but “0 per cent in 2030 year of assessment and thereafter.”

From 2030, all funds generated from the development levy will be passed to NELFUND.

He added that ASUU not only finds the development worrisome but also inimical to the growth of tertiary education in the country.

“The purported admonition that TETFund should seek innovative ways of generating its funds is spurious and ill-advised because, as a creation of an Act, the institution dies without the fund.

“Replacing TETFund with NELFUND is comparable to killing a parent to keep a newborn child alive; it is unethical and against the principle of natural justice.

“TETFund impacts not only tertiary-level education but also the secondary down to kindergarten; it directly and/or indirectly supports the production of quality teachers and different categories of support staff in the entire educational system,” he added.

On its part, the Nigeria Customs Service has identified what it called conflicts in the bills with some provisions of the Nigerian Customs Act 2023.

Speaking at the public hearing, the Comptroller General of the service, Adewale Adeniyi said Clauses 78, 79, 141(1) and 143 of the proposed Nigeria Tax Bill 2024 conflict with the provisions of the NCS Act 2023.

He urged the Senate Committee on Finance to address the anomaly ahead of the third and final reading of the bills.

“We have started to get results of this modernisation of our tax laws. In terms of revenue, our revenue has increased by 97 per cent and has been on an upward trajectory.  We have seen results in just about two years, less than two years, after the enactment of the Act.

“We, therefore, feel that two years into the implementation of an Act is a little bit too small for us to contend and repeal as this Act is saying”, he said.

The Chairman, Senate Committee on Finance, Sani Musa (APC Niger), while responding to the submissions, said the committee has taken note of them and would critically review them for further legislative action.

In its submission, the Petroleum and Natural Gas Senior Staff Association of Nigeria called for restraint, warning that “The proposed reforms must not impose unintended burdens on the industry, leading to job losses, investment flight, or operational inefficiencies.”

Speaking at the public hearing, the President of the Association, Festus Osifo called for the adoption of a balanced approach to ensure that tax reforms support national revenue objectives while maintaining an enabling environment for petroleum industry growth and sustainability.

Osifo also cautioned the lawmakers to be mindful of job security in the oil and gas sector, saying, “PENGASSAN urges the National Assembly to adopt a tax framework that balances government revenue needs with economic growth and industry sustainability. The petroleum sector remains vital to our national economy, and we must ensure that tax reforms do not discourage investment or threaten job security.”

Meanwhile, the Nigerian Supreme Council for Islamic Affairs in its memorandum on the tax bills submitted to the Senate Committee on Finance on Tuesday called for the consideration of the major technical and political-socio issues raised by different sections and segments of the country.

While noting that the 1999 Constitution of the Federal Republic of Nigeria (as amended) provides for the establishment of Shariah Court of Appeal for Muslim personal laws which include marriage and inheritance; the council recommended that  “All sections of the bills that may directly or indirectly impugn on the law on Shariah would be unconstitutional and should therefore be removed.”

It also urged that “The term ‘ecclesiastical’ used in a section of the bills should be changed to ‘religious’ in other not to give the impression that it excluded some religious group.”

That said, the NSCIA called on the National Assembly to pass the bills in the interest of the nation.