The appeal of the Academic Staff Union of Universities (ASUU) to increase education tax to 10 percent has been criticised by tax experts.
Investors King recalls the statement made by the ASUU President, Prof Emmanuel Osedeke in an interview, lamenting poor funding of Nigerian tertiary institutions. He proposed a 10 percent tax to improve the situation.
A Fiscal Policy Partner and Africa Tax Leader, PwC, Taiwo Oyedele, on his part opposed ASUU’s proposal noting that education tax was recently increased from 2.5 percent to 3 percent last year.
Oyedele pointed out that when several taxes including income tax, police tax, technology tax and others a calculated, each company will be paying over 40 percent which is on the high side.
He stated, “For those of us who are involved in tax matters, I can tell you authoritatively that one basis point of education tax rate is equivalent to two basis points of companies income tax rate because it is calculated on a much larger base than companies income tax.
“This is one of the highest in the world for a country where you need to attract investments. It is even higher than the OECD. The problem that we have in the educational sector is not by increasing the burden on the private sector to fund them. The fundamental question is that over the last 10 years, education tax has contributed over N2tn to that sector. Who is explaining how that money has been spent?” he asked.
Also speaking on the issue, the Chief Executive Officer of the Financial Derivatives Company, Bismark Rewane stressed that such tax increase is not needed at the moment drawing the attention of the government to other means of funding education.
Rewane advised that money gotten from subsidies can be largely transferred to fund education.
He further encouraged scholarship opportunities, grants and bursaries from the government and private firms
His words, “that is another knee-jerk reaction with all due respect to ASUU. What have we achieved with the 2.5 per cent Tertiary Education Tax? We should look at how utilisation of tax proceeds has been as well as its impact.”
“I believe a much more viable option is to give scholarships, grants and bursaries so that people can have education. Free, compulsory and quality education is a right.”
