The Federal Government plans to allocate 25 per cent of revenue from the proposed development levy to the Student Education Loan Fund in 2025.
This is according to a new 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, was obtained from the National Assembly and offers insights into the government’s tax strategy and fund distribution over the coming years.
The bill stipulates that companies, excluding small and non-resident companies, who are liable for taxation will pay a development levy on their accessible profits.
For the 2025 and 2026 tax years, the levy will be set at four per cent, followed by a reduction to three per cent from 2027 to 2029, and a further decrease to two per cent from 2030 onwards.
The bill read in part, “A development levy is imposed on the assessable profits of all companies chargeable to tax under chapters two and three of this Act, other than small companies and non-resident companies, as follows (a) for 2025 and 2026 years of assessment, four per cent;
“(b) for 2027, 2028 and 2029 years of assessment, three per cent; and (c) 2030 year of assessment and thereafter, two per cent, which shall be solely for the Student Education Loan Fund. The Service shall collect the levy and pay it into a special account created for that purpose.”
The revenue distribution plan prioritises educational funding, with a particular focus on the Student Education Loan Fund.
For the 2025 and 2026 assessment years, 25 per cent of the levy revenue will be directed to this fund, rising to 33⅓ per cent between 2027 and 2029, and reaching 100 per cent from 2030 onwards.
This shift highlights the government’s long-term strategy to support students through loan schemes.
Other allocations include the Tertiary Education Trust Fund, which will receive 50 per cent of the levy revenue in 2025 and 2026, increasing to 66⅔ per cent between 2027 and 2029.
However, from 2030, TETFUND will no longer receive any share of the levy.
The National Information Technology Development Fund and the National Agency for Science and Engineering Infrastructure will also receive allocations of 20 per cent and 5 per cent, respectively during the first two years.
These two funds will be excluded from the levy’s distribution from 2027 onwards.
The bill further clarifies that profits subject to the hydrocarbon tax will be exempt from the development levy.
From 2030, the entire revenue from the development levy will be dedicated to the Student Education Loan Fund, making it a key pillar of educational support in Nigeria.
