BY Aderonke Oni
An executive bill proposing a development levy of 4 percent is before the national assembly for consideration.
The bill, seen by TheCable, said the new levy would be imposed on the assessable profits of all companies liable to tax — excluding small companies and non-resident firms.
TheCable understands that the new levy would replace the education tax currently imposed on Nigerian companies at the rate of 3 percent — if the national assemby passes the bill.
In addition, the National Information Technology Development Agency (NITDA) levy of 1 percent, and the National Agency for Science and Engineering Infrastructure (NASENI) levy of 0.25 percent, are expected to be scrapped.
According to the bill, the proposed levy will be introduced in phases, starting at 4 percent for the 2025 and 2026 assessment years, then 3 percent for 2027, 2028, and 2029.
The document said from 2030, the levy will further decrease to 2 percent, solely for the student education loan fund.
“The service shall collect the levy and pay it into a special account created for that purpose,” the bill said.
Outlining the distribution formula of revenue from the development levy, the bill said about 50 percent would go to the tertiary education trust fund (TETFund) in 2025 and 2026.
While the document recommended an increase in TETFund’s share to “66 percent in 2027, 2028, and 2029 years of assessment”, the body would cease to get any revenue from 2030.
Similarly, the student education loan fund would get 25 percent in 2025 and 2026, increasing to 33 percent between 2027 and 2029.
According to the proposed law, 100 percent of the development levy’s revenue would be “directed towards supporting the student education loan fund” from 2030 onwards.
The document also proposed a discontinuation of funding for NITDA and NASENI from 2027.
“National Information Technology Development Fund: 20% in 2025 and 2026 years of assessment, and 0% in 2027 and thereafter,” the document reads.
“National Agency for Science and Engineering Infrastructure: 5% in 2025 and 2026 years of assessment, and 0% in 2027 year of assessment and thereafter.”
The bill also clarified that the development levy will not apply to assessable profits calculated for hydrocarbon tax purposes.
President Bola Tinubu had, on April 3, signed the student loans re-enactment bill into law.
The legislation would allow Nigerian students in tertiary institutions to access low-interest loans for tuition and other academic needs.
Tinubu believes that the student loans law would ensure education is given the proper attention necessary for the country, including skills development programmes.
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