Education Institutions now liable to Company Income Tax.

Editor’s Note: This article was originally written on January 25, 2022 and is being republished here for archival purposes.

This Information Circular is issued to Clients of Gbenga Badejo & Co. (Chartered Accountants) & GBC Professional Services for information on relevant provisions of the Act.

INTRODUCTION

President Muhammadu Buhari, GCFR recently signed the 2021 Finance Bill 2021 into law following its passage by the National Assembly.

Below is the change in the Finance Act 2021 as it affects the Education Sector:

Profits of companies engaged in educational activities are no longer exempt from tax under Section 23(1 )(c) of CITA. .i.e., Educational institutions that are profit oriented will be liable to CIT on their profits. The applicable tax rate depends on whether the educational institution is classified as a small, medium or large company.

Such institutions would benefit only from the general exemption applicable to public interest businesses, i.e. to Not-For-Profit organisations providing ecclesiastical or charitable activities of a public character.