For the second time in two years, the Federal Government has increased Tertiary Education Tax from 2.5 per cent to 3 per cent.
It was increased from 2 per cent in the Finance Act 2021 to 2.5 per cent and it has now gone up to 3 per cent in the backdated 2023 Finance Act.
Former President Muhammadu Buhari signed the Finance Act 2023 on May 28, 2023 and backdated the commencement date of the Act to May 1, 2023.
In the latest Finance Act, the former President jacked up the Tertiary Education Tax rate from 2.5 per cent to 3 per cent of assessable profits. Tertiary Education Tax is imposed on every Nigerian 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 educations, 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.