The Federal Government of Nigeria has unveiled plans to allocate 25% of the revenue from a new development levy to the Student Education Loan Fund in 2025. This initiative is part of a broader taxation strategy outlined in a bill titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions and Instruments, and Related Matters.”
The bill, dated October 4, 2024, obtained from the National Assembly, sets the framework for tax reforms and revenue distribution over the next decade. It introduces a development levy on the assessable profits of companies, excluding small and non-resident companies, with the funds aimed at supporting various educational and infrastructure projects.
According to the bill, the development levy will be set at 4% for the 2025 and 2026 tax years. The rate will then drop to 3% for the 2027-2029 period and further decrease to 2% from 2030 onward. A portion of the levy will be directed to the Student Education Loan Fund, rising from 25% in 2025 and 2026 to 33⅓% from 2027 to 2029, and eventually reaching 100% from 2030.
The bill also outlines how the remaining levy revenue will be distributed. The Tertiary Education Trust Fund (TETFUND) will receive 50% of the revenue in 2025 and 2026, which will increase to 66⅔% between 2027 and 2029. However, from 2030, TETFUND will no longer receive any part of the levy. Additionally, the National Information Technology Development Fund and the National Agency for Science and Engineering Infrastructure will receive 20% and 5% of the levy revenue, respectively, in the first two years, but will be excluded from 2027 onward.
The bill emphasizes the government’s long-term commitment to supporting education through student loan schemes while adjusting funding allocations for other sectors over time. The hydrocarbon tax profits will be exempt from the development levy, signaling that the levy’s focus will be on companies operating outside the oil and gas sector.
