Educational institutions in Nigeria paid 42% more taxes by the third quarter of 2023 based on a quarter-by-quarter analysis of data from the National Bureau of Statistics (NBS).
This increase occurs amid concerns over the rising cost of education in the country, which can worsen the number of out-of-school children in Nigeria.
The analysis by Nairametrics includes Value Added Tax (VAT) and Company Income Tax (CIT).
A total of N13.82 billion in taxes were paid by institutions in the education sector by Q3 2023, which was a 42% increase when compared to the N9.76 billion paid by Q2 2023.
Year-on-year, there was an increase of 34% from the N10.3 billion recorded in the third quarter of the previous year.
The analysis shows that the increase in taxes is more pronounced for CIT than for VAT.
According to the Federal Inland Revenue Service (FIRS), CIT is a 30% tax imposed on the profit of companies and VAT is a 7.5% consumption tax paid when goods are purchased, and services rendered and borne by the final consumer.
VAT Payment
FIRS collected N6.82 billion as VAT from institutions in the educational sector by Q3 2023, which was an increase of 26.92% from the N5.38 billion collected in the previous quarter.
The amount collected in Q3 2023 was also an increase of 26.31% from the N5.4 billion collected in the same quarter of the previous year.
VAT made up 49% of the taxes FIRS collected from educational institutions by Q3 2024. The rest was CIT, which recorded the most increase.
CIT Payment
The amount of CIT collected exceeded the amount of VAT collected by about N180 million as approximately N7 billion was collected by FIRS from educational institutions.
This amount was 59.6% higher than the N4.39 billion recorded by Q2 of the same year and 42.89% higher than the N4.9 billion collected in the same quarter of 2022.
Education Inflation
An analysis by Nairametrics further shows that Nigeria’s education inflation rate was 21.07% in October 2023. This is according to the most recent CPI report released by the NBS.
The education index rose by 21.07% year-on-year in October, which was interestingly a 0.29% point decrease from 21.36% recorded in the previous month. Before the slight decline in October, there had mostly been an increase throughout the year with a decline recorded only in July and August, which was when schools went on the long holidays.
The education index of the CPI is an index used to measure the changes in the cost of educational services in the country.
More Insight
There have been rising concerns over the affordability of school fees, especially in public tertiary schools, as a number of them increased school fees this year.
Following the assent of the Student Loan Act by the Tinubu-led administration on June 12, 2023, many public universities in Nigeria raised fees for the 2023–2024 academic year, citing the current economic climate and the need to meet stakeholder and student obligations in light of rising living costs.
Aside from Federal Government-owned schools, secondary schools also adopted a fee increase frenzy.
According to findings from news reports, the following tertiary institutions increased school fees:
- University of Lagos raised undergraduate tuition fee from N 20,000 to over N100, 000 per session
- University of Maiduguri from N29, 830 to N74, 000
- University of Nigeria, Nsukka charged between N 85,000 and N95,000 and demanded between N114,650 and N120,650 from new and old students.
- Niger Delta University in Bayelsa State, charged N100,000 from N37,000
- Kwara State University fee goes up from N85,000 to N200,000
- National Open University from N36,000 to N55,000.
Also, news reports show that several poor students in Federal Government-run universities in Nigeria are facing disruptions in their studies in 2023 after many institutions increased their tuition fees by 100% to 200%. While the increment may force some underprivileged students out of school, others may have to defer their studies for at least a year.
The All-Africa Students’ Union (AASU) recently decried the high cost of education in the continent, noting that the hike in school fees has become rampant.
Also, Nigeria’s Academic Staff Union of Universities (ASUU) urged the Federal Government to review the hike in Federal University fees, which could be counterproductive, for the development of Nigeria’s youth.
