FG Increases Tertiary Education Tax By 2.5%

The Federal Government of Nigeria has again increased tertiary education tax from 2.5 percent to 3 percent, so as to make more fund available for provision of Infrastructure in public universities, polytechnics and colleges of education in the country

It  will be recalled that the tax was initially increased from 2 percent in the Finance Act 2021 to 2.5 percent and has gone up to 3 percent in the backdated 2023 Finance Act.

Former President Muhammadu Buhari had signed the Finance Act 2023 on May 28, 2023 and backdated the commencement date of the Act to 1 May, 2023

Tertiary education tax is imposed on every company at the rate approved by the President of the assessable profit for each year of assessment. 

The funds are disbursed for the general improvement of education in federal and state tertiary institutions, specifically for the provision or maintenance of: Essential physical Infrastructure for teaching and learning; instructional material and equipment; research and publications.

Also contained in this year’s Finance Act is the reintroduction of the payment of taxes for purchasing life insurance policy for an individual or a couple.

According to the Act: “Tax deduction is restored for premium paid in respect of insurance on own life and spouse”.

Other changes made to the old Finance Act include: taxation of gains on the disposal of digital assets including cryptocurrency at the rate of 10 percent; deduction of capital losses on assets for capital gains tax purposes.

There is now the rollover relief on sale of shares. This is however subject to reinvestment of the proceeds within the same year of assessment. There is now the deletion of investment allowance on plant and equipment

Government has imposed a 0.5 percent levy on goods imported into Nigeria from outside Africa. 

All services including telecommunication services are liable to excise tax at rates to be prescribed by the President.

Buhari in his last minute assent to the 2023 Finance Act retained the contentious sharing formula of Electronic Money Transfer (EMT) levy at 15 percent to the federal government, 50 percent to state governments and 35 percent to local governments. 

EMT is a singular and one-off levy of N50 on the recipient of any electronic receipts or transfers of N10,000 

Culled From The Nation