Reps probe N123.48bn education tax deductions in NRS, TETFund dispute
The House of Representatives has begun investigating N123.48 billion in disputed deductions from Education Tax collections, following a disagreement between the Nigeria Revenue Service (NRS) and the Tertiary Education Trust Fund (TETFund) over the legality of a four per cent cost-of-collection charge.
The dispute, covering deductions made between 2012 and 2024, centres on whether the NRS was legally entitled to apply the charge to the entire Education Tax collected, including the portion paid by oil companies.
The disagreement came to the fore on Wednesday in Abuja when both agencies appeared before the House Public Accounts Committee (PAC) to respond to audit queries on revenue collections and remittances.
TETFund’s Director of Finance and Accounts, Dr Gloria Olotu, told the committee that the four per cent collection charge should apply only to non-oil revenue and not the entire Education Tax proceeds.
She explained that the Auditor-General had initially identified discrepancies between the Education Tax collected by the NRS and the amount remitted to TETFund, prompting the Fund to investigate the deductions.
According to her, the investigation revealed that the NRS had calculated its collection charge on the entire Education Tax without excluding the oil revenue component.
Olotu said figures derived from the NRS’s own submissions showed that excess deductions over the 12 years amounted to N123,486,953,796.24.
She added that TETFund had written several letters to the revenue agency seeking a refund but had yet to receive a favourable response.
However, the NRS rejected the allegation, insisting that the deductions were lawful under Sections 15A and 69 of the NRS Act.
Its Executive Director, Shettima Tamadi, argued that Section 69 defines non-oil revenue as all revenue other than proceeds from Petroleum Profits Tax (PPT).
He maintained that Education Tax paid by oil companies does not constitute Petroleum Profits Tax, noting that oil companies pay the two taxes separately.
Tamadi stressed that the NRS does not deduct collection costs from Petroleum Profits Tax payments, insisting that its treatment of Education Tax complies with the law.
The committee, chaired by Rep. Bamidele Salam, said the conflicting interpretations required an authoritative legal clarification from the Attorney-General of the Federation before a determination could be made.
TETFund told the lawmakers that it had previously sought the Attorney-General’s opinion on the matter.
The committee resolved to independently obtain the legal advice and directed TETFund to submit its written position alongside relevant legal documents for further examination.
The hearing was subsequently adjourned pending the submission of the documents and the committee’s review of the legal position.
The outcome could determine whether TETFund is entitled to recover N123.48 billion in disputed deductions and clarify the scope of the NRS’s statutory authority to charge for revenue collection.
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