Tertiary education tax in Nigeria

Education, as a way of learning, helps to inculcate the proper attitudes and social interaction on people. Tertiary education can be defined as learning acquired after the secondary (or high) school level. Post secondary school level includes certificates from polytechnics, colleges of education, or universities. While education facilitates development, tertiary education enhances the ability of individuals to be agents of transformation 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 (TETF) were to manage and disburse the fund’s revenue to public tertiary institutions in Nigeria. The main source of revenue was from the annual charge of tertiary education tax on companies.


Based on the Finance Act 2023 and TETF Act 2011, tertiary education tax is payable for a company registered in Nigeria at the rate of 3% of the assessable profit (Old rate – 2.5%). It is important to note that the Federal Government recently increased the TET rate from 2% to 2.5% in the Finance Act 2021. The new rate of 3% will take effect for accounting period ending on or after September 1, 2023. Nevertheless, non-resident companies, small companies and unincorporated businesses such as sole proprietorship are exempt from tertiary education tax. A small company is an entity with an annual turnover of NGN25 million (Twenty-five million naira) 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. Under the Finance Act 2021, the tertiary education tax is payable within 60 days of an assessment notice from the Federal Inland Revenue Service (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 for companies; including upstream petroleum companies. Under the Petroleum Industry Act 2021, TET is not more tax deductible for upstream petroleum operations. A company may have a TET payable when the assessable profit is positive and there is a taxable loss.

Updated: 14 March 2024

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