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Nigeria increases education tax to 2.5%
The Nigerian Government has increased education tax for tertiary institutions from 2 to 2.5 per cent. The new tax is payable by Nigerian companies. Will this impact the cost of tertiary education in the country? Chamberlain Peterside, CEO of Xcellon Capital Advisors, joins CNBC Africa for more.
Mon, 17 Jan 2022 12:29:10 GMT
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AI Generated Summary
- The increase in education tax from 2 to 2.5% for tertiary institutions in Nigeria is a targeted approach to address the funding challenges faced by the education sector.
- Chamberlain Peterside highlighted the urgent need for improved funding in public universities, citing inadequate infrastructure and resources in these institutions.
- Exploring other measures like levies and new taxes on specific sectors, such as IT and social media, can further enhance revenue generation and support economic growth.
Nigeria has recently increased the education tax for tertiary institutions from 2 to 2.5 per cent, a move that is aimed at addressing the funding challenges faced by the educational sector in the country. The new tax is payable by Nigerian companies and is intended to boost revenue generation specifically for educational purposes. Chamberlain Peterside, the CEO of Xcellon Capital Advisors, shared insights on this development in a recent interview with CNBC Africa. Peterside emphasized the importance of this targeted increase, highlighting the urgent need for improved funding in the education sector. He pointed out that Nigeria currently spends a mere seven cents of the GDP on education, leading to significant challenges in adequately funding public universities. Peterside noted the lack of up-to-date laboratories and infrastructure in these institutions, underscoring the necessity of mobilizing additional funds through initiatives like the education tax. He stressed that investments in education would yield multiple dividends in the long run, making the move a favorable one for corporate entities. Additionally, Peterside discussed the broader revenue challenges facing the government and suggested that exploring other measures, such as levies or new taxes on specific sectors, could further bolster revenue generation. He highlighted provisions in the new finance act that target multinational corporations, particularly those in the IT and social media sectors, as potential sources of additional revenue. By focusing on these targeted tax increases, Peterside commended the government's shift in strategy towards raising funds for sectors that hold potential for economic growth and development in the future.
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