The Impact Of Education Tax Fund On Tertiary Institution In Nigeria

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The purpose of this study was to find out the impact of education tax fund (ETF) on tertiary institutions in Nigeria. The study examined how education tax funds as impacted on tertiary institution in Nigeria. Data were obtained using research questionnaire from (100) students who are already in tertiary institution in Nigeria. The decision of this study was prompted by the important role that education tax fund has played on tertiary institution in Nigeria. The statistical method employed for analysis was the simple percentage method. The analysis of the responses to the researcher questionnaire yielded the following findings.  




Background to the study

Statement of problem

Objectives of the study

Significance of study

Research questions

Scope of the study

Limitations of the study

Definition of terms


Review of related literature


1Research design

Population of the study

Sampling of the study

Sample technique adopted


Method of data collection

Method of data analysis


Presentation of data and discussion of results










Education has been defined differently by various scholars. Okonkwo (1988) defined education as a cultural action directed at creating attitudes and habits considered necessary for participation and intervention in one’s historical process. According to Okafor in Iwuchukwu (1993) defined education as a process of acculturation through which the individual is helped to attain the development of his potentials and their maximum activation when necessary according to right reason and to achieve hereby his perfect self-fulfillment.

In the view of Uche (1984) education is the process of training and developing of the mental potentials, physical knowledge skills and characters of individuals by formal and informal schooling. But Iwuchukwu (2006) is of the view that the emergence of the national policy on education journey, which began since 1847 with the establishment of British privy council on education. Tertiary institution according to National Policy on Education (1981) are those institution that cover the post-secondary section of national education system which given on universities, polytechnics and college of technology including College of Education\, the advanced teachers training colleges, correspondence colleges and institution as may be due to them.

Over the year, it has been conjectural by education experts that one of the major problems military against the realmation of the objectives of establishing tertiary institutions in Nigeria problem of poor funding on this, therefore Ozurumba (1998) said the best education plan could be easily aborted if not supported by adequate funds. Inadequate funding of the system has been a contributing problem in this country. Authenticating this further Amadi (1999) said during the oil boom, the current period of great economic reversals in the petroleum oil sector, financing of education has suffered untold damages.

To this end, tertiary institutions need finance to carry out research in medicine, engineering, education etc they need funds for training and retraining of lectures, acquire state of the art facilities and other amenities that can engender student’s potentials to the overall achievement of the arms and objectives of higher education in Nigeria. Moreso, as a result of the job opportunities available to graduates and our increasing population, there was a demand for higher education which led to the government to introduce tax to education sector.

Tax fund is an amount of money that has been saved or has made available to part to the government so that it can been for a public services. Tax fund is used by the government to maintain and take care of some certain things in the country. Under current Nigeria law, taxation is enforced by the three tiers of government, i.e. federal, state and local government with each having its sphere clearly spelt out in the taxes and levies (approved list for collection) degree 1998, of importance at this juncture however are tax regulations pertaining to investors both foreign and local.

The importance of tax regulations cannot be overemphasized, as most transactions with any ministry, department, or government agency cannot be concluded without evidence of tax clearance i.e. a tax clearance certificate certifying that all taxes due for the three immediately preceding years of assessment have been settled in full. The following are some of the relevant tax regulations in the country.

  1. Value added tax (VAT): This was introduced by the VAT decree No 2 of 1993, to replace the old sales tax. It is a consumption chain and is borne by the final consumer. It requires a taxable person upon registering with the federal board of inland revenue to charge and collect VAT at a flat rate of 5% (recently increased to 10%) of all invoiced amount of taxable goods and services.
  2. Capital gaining tax: This accrues on an actual year basis and it pertains to all gains accruing to a tax payer from the sale or lease or other transfer of proprietary right in a chargeable interest which are subject to a capital gains tax of 10% such chargeable assets may be corporate or incorporate and it does not matter that such asset is not situated in Nigeria.
  3. Education tax: An education tax of 2% of assessable profits is imposed on all companies incorporated in Nigeria. This tax is viewed as a social obligation placed on all companies in ensuring that they contribute their own quota in developing educational facilities in the country.
  4. Personal income tax: The legal basis for this tax is found in the provisions of the personal income tax decree (now act) 104 of 1993.

Tax fund has enable the government to be able to establish or building of schools repairing of roads and other government projects that benefits the citizen. The funding of these higher institutions rested surely on the government which bore this neck breaking burden. Also the government had to introduce new programmes and specialized areas were introduced and facilities, equipment for teaching and learning were provided and the government had to give out scholarship and bursary awards to students.

To alleviate this gigantic burden, the education tax fun (ETF) decree No 7 of 1st January, 1993 was promulgated. It is in the light of this that this study has been designed investigation into the impact of education tax fund on tertiary institutions.


The lack of adequate fund for our tertiary institutions has been bane to the realization of the objective of the establishing them. Fourteen years after the education tax decree and it subservient implementation has the scenarios in our tertiary institution really changed?

Prior to the enactment of this decree out tertiary institution were bedeviled with decayed faculties, congested classrooms and hostels outdated textbooks in our libraries. Those problem still exist in our tertiary institutions. If they still exist then there is a question to be answered on how the education tax fund (ETF) has impacted on our tertiary institution.


The objectives of engaging in this study are;

  1. To find out how beneficial the education tax fund has been to the tertiary institutions.
  2. To explore the problems impending the disbursement of the fund.
  3. To find out the solutions to these problems in order to enhance tertiary institution.


It is envisaged that this study will enable the government, students and the society at large to be acquainted with the numerous benefits of the education tax fund (ETF) rewards alleviating the plight of academic pursuits in our tertiary institutions. The findings will enable the society to know the various problems militating against the disbursement of this fund since its inception or origin.


The study is limited to the impact of education tax fund (ETF) on tertiary institutions in Nigeria. The study is not interested in explaining and or determining any learning outcome variables other than the impact of education tax fund on tertiary institution.

The result and conclusion to be drawn from the study are therefore limited to the defined tax fund but may be generalized to other tertiary institutions in Nigeria which have educational default.


Tax: money that you have to pay to the government so that it canpay for public services.

Fund: An amount of money that has been saved or has been made available for a particularly purpose.

Education: A process of teaching training and learning, especially in schools or colleges, to improve knowledge and develop skills.

University: An institution at the highest level of education where you can study for a degree.


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