Why Tax Reforms Should Not ‘Kill’ TETFund – Stakeholders’ Concerns

Explore why stakeholders are opposing the Nigeria Tax Reform Bill 2024 provisions that threaten to phase out TETFund, a critical lifeline for public tertiary institutions.

The proposed Nigeria Tax Reform Bills 2024 are currently under review by the National Assembly, sparking debates about their potential impact on tertiary education funding. These bills include:

The Nigeria Tax Bill 2024 (NTB)
The Nigeria Tax Administration Bill 2024 (NTAB)
The Nigeria Revenue Service Establishment Bill 2024
The Joint Revenue Board Establishment Bill 2024

Their primary aim is to consolidate taxation frameworks and enhance revenue collection systems. However, Part X of the Nigeria Tax Bill 2024 has raised concerns among stakeholders, particularly regarding its treatment of the Development Levy, which is funded by taxes on corporate profits. This levy directly supports various educational and developmental agencies, including the Tertiary Education Trust Fund (TETFund).

How TETFund and Other Institutions Are Affected

Under the proposed NTB 2024, the Development Levy will be distributed among four institutions:

TETFund
Nigerian Education Loan Fund (NELFund)
National Information Technology Development Agency (NITDA)
National Agency for Science and Engineering Infrastructure (NASENI)

The distribution structure for the levy is as follows:

2025–2026: TETFund receives 50%, NELFund 25%, NITDA 20%, and NASENI 5%.
2027–2029: TETFund gets 66.7%, while NELFund receives 33.3%; NITDA and NASENI get nothing.
2030 and beyond: The entire levy (100%) is allocated to NELFund, with TETFund excluded.

This phased removal of TETFund’s funding has drawn widespread criticism from lecturers, parents, and education advocates, who argue that it threatens the future of public tertiary education in Nigeria.

Concerns from Stakeholders

Parents’ Perspective

The National Parent Teacher Association of Nigeria (NAPTAN), represented by its National President, Alhaji Haruna Danjuma, warns that eliminating TETFund will lead to a spike in tuition fees at public universities. Institutions will struggle to fund capital projects and may shift the burden onto students and parents through increased charges.

“If there is no TETFund, institutions will rely on internally generated revenue, ultimately taxing students and parents,” Danjuma cautioned.

ASUU’s Standpoint

The Academic Staff Union of Universities (ASUU) strongly opposes the proposal to phase out TETFund. According to ASUU National President, Prof. Emmanuel Osodeke:

TETFund has been instrumental in maintaining infrastructure and facilities in public institutions.
Redirecting all Development Levy funds to NELFund will lead to skyrocketing tuition fees, making tertiary education inaccessible to low-income families.
The move undermines the original purpose of the Education Tax Fund (ETF), now TETFund, which was established through years of advocacy and struggle.

“Without TETFund, many public institutions would collapse due to a lack of basic facilities. We urge the government to reconsider this plan,” Prof. Osodeke stated.

Adverse Effects Highlighted by ASUU Lagos Zonal Coordinator

Prof. Adelaja Odukoya emphasized that replacing TETFund with NELFund promotes a culture of student debt, similar to systems in countries like the United States. He argued that this model could:

Widen socioeconomic inequalities by discouraging students from underprivileged backgrounds from pursuing higher education.
Reduce societal benefits of education, such as lower crime rates, improved public health, and greater civic involvement.
Impair educational quality by leaving institutions without critical funding for infrastructure and resources.

“TETFund directly improves institutions and communities by raising the quality of education. Its elimination would undermine these efforts,” Adelaja noted.

Why TETFund Must Be Preserved

TETFund has played a vital role in sustaining public tertiary institutions in Nigeria. The majority of modern infrastructure and facilities on campuses have been funded through TETFund allocations. Stakeholders argue that its removal will:

Force institutions to drastically raise tuition fees, thereby excluding many Nigerians from accessing higher education.
Undermine years of progress in improving the quality of tertiary education.
Shift the financial burden of education from the government to individual students, which is counterproductive in a developing nation.

Call to Action

Stakeholders, including parents, lecturers, and education advocates, are urging the federal government to reconsider the NTB 2024 provisions that phase out TETFund. Preserving TETFund is critical to maintaining equitable access to quality education and ensuring the sustainability of public tertiary institutions in Nigeria.