What is Tertiary Education Tax?

Tertiary Education Tax, formerly referred to as Education Tax is the tax imposed on all resident companies in Nigeria. Simply put, education tax is imposed on all companies registered in Nigeria as a contribution to the Education Trust fund. The rate of the tax is 2% of the assessable profit for each year assessment. The Education Tax Act of 2004 which is the law regulating the Education Tax has been repealed by the Tertiary Education Trust Fund Act, 2011 to regulate Tertiary Education Tax.

How is Tertiary Education Tax collected?

Tertiary Education tax is collected by the Federal Inland Revenue Service (FIRS). The FIRS have the duty to assess the companies; after which the assessment notice would be served upon the company. The company would then be required to pay the tax within 2 months of receiving an assessment notice.

Also, most companies pay their tertiary educational tax based on self-assessment alongside their company’s income tax. However, for companies that are subject to Petroleum Profit Tax(PPT), tertiary education tax is to be treated as an allowable deduction i.e. the amount paid by the companies subject to the PPT would be subtracted from their taxable income before calculating the amount for PPT. Furthermore, companies that are not resident in Nigeria and unincorporated entities are exempted from education tax.

What is the rationale for Tertiary Education Tax?

The Tertiary Education Tax was introduced due to theestablishment of the Education Fund. The tax collected is for the rehabilitation, restoration and consolidation of tertiary education in Nigeria and it is managed by the Board of Trustees as contained under the Tertiary Education Trust Fund Act, 2011.

How is Tertiary Education Tax distributed?

The tax is disbursed to Federal and State Tertiary Educational institutions by the Board of Trustees. The tertiary education taxis distributed in the ratio of 2:1:1 between universities, polytechnic and college of education.  

What is the Penalty for Defaulters?

A person who is in defaults of any provision of the Tertiary Education Trust Fund Act of 2011 shall upon conviction be liable for a first offence to a fine of 1,000,000 or imprisonment for a term of 6 months and for a second and subsequent offence to a fine of 2,000,000 or imprisonment for a term of 12 months or to both such fine and imprisonment





MOSHOOD ABDULMAJEED ADENIYI is currently a final year student of law, Univeristy of Ilorin. He is passionate about legal research and a diligent tax euthusiast. He can be reached via Email: moshoodabdulmajeed@gmail.com Mobile No: 09030528182

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