President of the Academic Staff Union of Universities (ASUU), Prof. Emmanuel Osodeke, has said the pledge by All Progressives Congress (APC) presidential candidate, Bola Tinubu, to provide students with loans if elected is not viable and implementable, adding that it will be another form of bondage.
He proposed that instead of the credit facility, there should be an increase in education tax from 2.5 to 10 per cent to fund infrastructure in Nigeria’s universities, noting that 10 per cent of the profits from large corporations should be invested in the education sector.
During a live programme, the ASUU boss recalled: “In 1992, when we had a disagreement with government, it said we should look for other sources of funding. That was how TETFund came. This time around, government is saying there is no money to fund it (TETFund) and it is talking about raising tuition. How will a man earning N30,000 be able to afford it (the proposed increase)? Why not take 10 per cent profits of big companies and inject into the education system so that you have a better and free country?”
In his remarks, Chief Executive Officer of Financial Derivatives Company, Bismark Rewane, also faulted the proposed loan scheme as being unviable, advising that money saved from subsidies should be deployed to fund education.
He said: “The first thing a lender worries about is the source of 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 U.S., it is a problem. I believe a much more viable option is to give scholarships, grants and bursaries so that people can have education. Free, compulsory and quality education is a right.”
While reacting to Osodeke’s proposal, Rewane stated that the tertiary education tax is not right at the moment.
He went on: “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.”
Fiscal Policy Partner and Africa Tax Leader, PwC, Taiwo Oyedele, also disagreed with Osodeke, stating that the education tax had recently increased just a year ago.
His words: “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 basis than companies’ income tax.”
He argued that when companies’ income tax, technology tax, police tax and science and engineering tax, among others are computed, a firm would effectively be paying over 40 per cent tax.