Tertiary education tax in Nigeria

Education, as a way of learning, helps to inculcate the proper attitudes and social interaction on people. Tertiary education represents any form of education acquired after the secondary (or high) school level. This includes certificates from polytechnics, colleges of education, and universities. While education facilitates development, tertiary education enhances the ability of individuals to be transformation agents in a country. However, the inadequate infrastructure of Nigeria’s academic sector coupled with human resources issues, student riots, and staff strike led to the deteriorating standard of education. The rise in illiteracy spurred extensive discussions on how to resolve the educational crises in the 1980s. One of the recommendations was to create a fund, Tertiary Education Trust Fund (Establishment Etc.) Act 2011, for the rehabilitation and harmonization of tertiary education policies in Nigeria.

Other goals of the Tertiary Education Trust Fund were to manage and disburse the fund’s revenue to public tertiary institutions in Nigeria. The Act also imposed tertiary education tax on a company registered in Nigeria at the rate of 2% of the assessable profit. Even so, non-resident companies, small companies and unincorporated businesses such as sole proprietorship, etc. are exempt from tertiary education tax. A small company is a company with an annual turnover of NGN25million and below.

An eligible company will complete a tertiary education tax (TET) return containing details such as assessable profit, rate of tax and amount payable. The tertiary education tax is payable within 60 days of an assessment notice from the Federal Inland Revenue (FIRS). In practice, many companies pay TET on a self-assessment basis together with their companies income tax (CIT).


TET is not an allowable deduction in calculating taxable income under CIT. A company may have a TET payable when the assessable profit is positive and there is a taxable loss. On the other hand, TET is an allowable deduction for companies that perform upstream petroleum activities. This group of businesses pays petroleum profit tax and TET is a deductible expense under the Petroleum Profit Tax Act. 

Updated: 6 May 2021


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