JUST IN: Governors Urge Tinubu to Retain TETFUND, Others Amid ASUU Outrage

Nigerian governors have called on President Bola Ahmed Tinubu to ensure the retention of the Tertiary Education Trust Fund (TETFUND) and similar intervention agencies, following strong opposition from the Academic Staff Union of Universities (ASUU) over proposed tax reform bills.

The Nigeria Governors’ Forum (NGF) made the appeal during a meeting with the Presidential Tax Reform Committee on Thursday. The forum emphasized the critical role of agencies like TETFUND, the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) in national development.

Background on Tax Reform Bills

The controversy stems from four tax reform bills transmitted by President Tinubu to the National Assembly on September 3, based on recommendations by the Presidential Committee on Fiscal and Tax Reforms. Among the bills are:

1. Nigeria Tax Bill 2024 – Outlines a new fiscal framework for taxation.

2. Tax Administration Bill – Establishes a clear legal framework for taxes to reduce disputes.

3. Nigeria Revenue Service Establishment Bill – Replaces the Federal Inland Revenue Service Act.

4. Joint Revenue Board Establishment Bill – Creates a tax tribunal and ombudsman.

One major point of contention is Section 56(3) of the proposed legislation, which suggests gradually phasing out funding for TETFUND. By 2025, TETFUND’s share of development levies would be reduced to 50%, dropping further until it reaches zero by 2030.

ASUU’s Concerns

ASUU President, Prof. Emmanuel Osodeke, has warned that the reforms would undermine the tertiary education system. He alleged that the proposed reduction in taxes allocated to TETFUND from 4% to 2% would weaken the agency’s capacity to support universities.

He criticized the plan to redirect funds to the Nigerian Education Loan Fund (NELFUND), labeling it a move that prioritizes student loans over institutional funding. “This will lead to the gradual winding down of TETFUND, and our universities will suffer greatly,” Osodeke stated, urging stakeholders to resist the bills.

Governors’ Recommendations

In response, the governors’ forum issued a communique advocating for the continuation of TETFUND, NASENI, and NITDA, without terminal clauses in their funding allocations.

The forum also proposed:

• Maintaining the current Value Added Tax (VAT) rate and Corporate Income Tax (CIT) to ensure economic stability.

• Retaining exemptions for essential goods and agricultural produce from VAT to protect citizens’ welfare.

• Endorsing a revised VAT-sharing formula:

• 50% based on equality,

• 30% based on derivation, and

• 20% based on population.

Implications and Next Steps

The proposed reforms have already passed the second reading in the Senate, raising concerns over their potential impact on education funding and economic stability.

The NGF’s intervention signals growing resistance to any move that could undermine Nigeria’s educational system or critical infrastructure agencies. Stakeholders are now urging the National Assembly to carefully review the bills before their final passage.

The government, however, maintains that the reforms aim to streamline taxation and improve fiscal accountability, with the Minister of State for Petroleum Resources, Heineken Lokpobiri, highlighting the importance of deregulation in ensuring transparency and efficiency.

The debate over these reforms continues to dominate public discourse, with education advocates and policymakers urging for a balanced approach that prioritizes national development.