The proposed increase in the Tertiary Education Tax from 2.5 to 10 per cent by the Academic Staff Union of Universities (ASUU) has been criticized by tax professionals.
The experts argued that such a move would be to the disadvantage of private firms which were already saddled with taxes.
The ASUU President, Prof Emmanuel Osedeke, had in an Arise TV interview suggested an increase in the education tax to improve the infrastructure in Nigerian universities.
“In 1992 when we had a disagreement with the government, the government said we should look for other ways of getting funding.
"That was how TETfund came. This time around, the government is saying there is no money to fund it and it is talking about using tuition to raise money.
"How will a man earning N30,000 be able to afford it?
"Why not take 10 per cent of big companies and inject into the education system so that you have a better and free country?” Osedeke had proposed.
However, tax specialists faulted this proposal, maintaining that it should not be implemented.
Taiwo Oyedele, leader of Fiscal Policy Partner and Africa Tax Leader, PwC, in an Arise TV interview, opposed the academic union, noting that the education tax was increased a year ago.
Oyedele said, “And based on the 2022 Finance Bill, there is a proposal to take it to three per cent from 2.5 per cent.
"For those of us who are involved in tax matters, I can tell you authoritatively that one basis point of education tax rate is equivalent to two basis points of companies income tax rate because it is calculated on a much larger base than companies income tax.”
The tax expert stated that after computing companies' income tax, technology tax, police tax, and science and engineering tax, among others, a firm would be expected to pay above 40 per cent tax.
He said, “This is one of the highest in the world for a country where you need to attract investments. It is even higher than the OECD.
"The problem that we have in the educational sector is not by increasing the burden on the private sector to fund them.
"The fundamental question is that over the last 10 years, education tax has contributed over N2tn to that sector.
"Who is explaining how that money has been spent?” he.
Bismark Rewane, the Chief Executive Officer of the Financial Derivatives Company, also said ASUU's proposal came at the wrong time, describing it as "another knee-jerk reaction".
He said, “That is another knee-jerk reaction with all due respect to ASUU.
"What have we achieved with the 2.5 per cent Tertiary Education Tax? We should look at how utilisation of tax proceeds has been as well as its impact.”
On the students’ loan scheme being proposed by a presidential candidate, Rewane said, “The first thing a lender worries about is the source of the repayment of the loan.
"You are lending students money to get education without knowing whether they will get jobs. I do not think it works anywhere.
"Even in the US, it is a problem. I believe a much more viable option is to give scholarships, grants and bursaries so that people can havan e education.
"Free, compulsory and quality education is a right.”
He however proposed the use of the money saved from subsidies to fund education.