Abuja Private School owners reject FCT’s 5 percent tax regime

The National Association of Proprietors of Private Schools (NAPPS), Federal Capital Territory, Abuja, has rejected the new tax regime imposed on members by the Department of Quality Assurance under the FCT Education Secretariat.

A letter of appeal by the Association signed by its Chairperson, Rukayat Agboola, and addressed to the FCT Minister, Nyesom Wike, the association said the new regime will lead to increase in the number of out-of-school children.

Agboola noted that the newly implemented tax system, as outlined by the Directorate of Quality Assurance (DOQ), imposes a substantial burden on private schools, irrespective of their location within the FCT.

In a memo, the Head of Account, Department of Quality Assurance of the Education Secretariat, Mudi Muhammed titled: had said “Following the approval of the Minister of the FCT for a review of operational charges,
“You are by this letter informed that the old rate of charges cease to be valid as of 31/12/2023 and the new rate of charges effective 1/1/2024.

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“Under the new rate, each school is billed according to the tuition charged and the number of enrollments. As a consequence, each school has its peculiar bill. You should also note that all application(s) are now N40,000.”

But in their letter, the Proprietors said they were worried about the financial strain on schools and, subsequently, on the parents who bear the brunt of these additional costs.

According to them, such tax regime may lead to an unfortunate increase in the number of out-of-school children within the FCT.

The Chairperson also said unless the Minister stops the Department of Quality Assurance from implementing the 5% charge, drastic review of school fees is imminent.

A member of the association also told our correspondent that efforts to persuade the DQA that charging 5% on school fees payable by parents amounts to charging Value Added Tax, whereas educational services are excepted from VAT.

“Charging or increasing any fee in the education sector amounts to waging economic war on the parents who obviously will bear the burnt of any additional levy on private schools.

“It is very funny that the FCT Education secretariat is introducing a new tax at a time when the presidential committee on tax reform has promised investors that it will harmonise multiple taxes in order to bring about the ease of doing business in Nigeria”

The Proprietors also said: “In our previous engagement with the DOQ, we highlighted the adverse effects of this tax on parents and schools, emphasizing the potential rise in the out-of-school children population due to economic hardships faced by families.

“Despite our efforts to advocate against the tax, we were disheartened to learn of its approval, as conveyed through a circular by the Head of Accounts.

“Honorable Minister, the burden of taxes and levies on FCT private schools has become overwhelming, leading to the frustration and closure of many institutions.

“Considering the current economic challenges, we earnestly appeal for your kind intervention to protect private school proprietors as essential partners in the quest for mass education in the FCT.”