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THE IMPACT OF EDUCATION TAX FUND ON TERTIARY INSTITUTION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Education has been defined differently by various scholars. Okonkwo (2010) defined education as “a cultural action directed at creating attitudes and habits considered necessary for participation and intervention in one’s historical process”.

According to Okafor in Iwuchukwu (2013), defined education as a process of acculturation through which the individual is helped to attain the development of his potentials and their maximum activation when necessary, according to right reason and to achieve hereby his perfect self-fulfillment.

In the view of Uche (2016) “education is the process of training and developing the mental potentials, physical knowledge skills and character of individuals by formal and informal schooling. But Iwuchukwu (2006:135-141) is of the view that the emergence of the National Policy on Education journey, which began since 1847 with the establishment of British Privy Council on education.

In September 1976, the National Education Policy came into force by changing the school calendar, which used to run from January to December, to now commence from September to August. In addition, the school system which used to be majority 8-5-4 (eight years of 2 pre-primary school, 5 years of secondary school and 4 years of university year of education changed to now 6-3-3-4 system. This means 6 years of primary education, 3 years of Junior Secondary and 3 years of Senior Secondary school and 4 years of University education.

Tertiary institution, according to National Policy on Education (1981:5-38) are those institution that cover the post-secondary section of national education system which is given on Universities, Polytechnics and College of technology including College of Education, the Advanced Teachers Training Colleges, Correspondence Colleges and Institution as may be allied to them.

Over the year, it has been conjectured by education experts that one of the major problems militating against the realization of the objectives of establishing tertiary institutions in Imo State problem of poor funding on this therefore, Ozurumba (1998:106), said the best education plan could be easily aborted if not supported by adequate funds. Inadequate funding of the system has been a contributing problem in this country. Authenticating this further, Amadi (1999:47) said: During the oil boom, the current period of great economic reversals in the petroleum oil sector, financing of education has suffered untold damages”.

To this end, tertiary institutions need finance to carry out research in medicine, engineering, education etc. they need funds for training and retraining of lectures, acquire state-of-the- art facilities and other amenities that can engender student’s potentials to the overall achievement of the arms and objectives of higher education in Niger state.

More so, as a result of the job opportunities available to graduates and our increasing population, there was a demand for higher education. The funding of these higher institutions rested squarely on the government which bore this neck-breaking burden-Okonkwo and Okonkwo (1998:97) said the high and continually growing financial burden in Niger State, through shared by other contributors, was principally shouldered by the government of the state which was responsible for the recurrent expenditure on education. Supporting this, Amadi 91998:47) stated: During the oil boom, the period of large profits in the petroleum oil sector, Imo State was economically viable and there was a boom in the financing of education. Many Imo citizens received scholarships and bursary awards to enable them to be trained in various fields of Endeavour. New programmers and specialized areas were introduced and facilities, equipment for teaching and learning were provided.

The period of oil boom was characterized by rapid disbursement of funds to institutions of higher learning as and when due, provision of money for research, oversea scholarship, training and retraining of lectures, infrastructure, apparatus for our laboratories etc.

However, like a flash in the pan, the era of oil boom dwindled. Uche (1984:135) observed that by April 1982, Niger State suffered from oil gout”. From 1989, there was a dramatic nose-diving of the price of our major source of foreign exchange earner (oil). The colossal burden of financing the tertiary institution became apparently uneasy and extremely unbearable.

To alleviate this gigantic burden, the Education Tax Fund Decree No.7 of 1st January, 1993 was promulgated. Odicha (1993:20) observed that this Decree finally imposes education tax of two percent on all the profit declared by companies registered in Imo State and establishes an education fund into which the tax collected shall be paid. It is in the light of this that this study has been designed to investigate the impact of education tax funds on tertiary institutions.

1.2 STATEMENT OF THE PROBLEM

The lack of adequate funds for our tertiary institution has been bane to the realization of the objective of establishing them. Fourteen years after the education tax decree and its subsequent implementation, have the scenarios in our tertiary institution that prompted it really changed?

Prior to the enactment of this decree our tertiary institutions were bedeviled with decayed facilities, congested classrooms and hostels out-dated textbooks in our Libraries. Do these problems still exist in our tertiary institution? If they still exist, then there is a question to be answered on how the Education Tax Fund (ETF) has impacted on our tertiary institution.

Could it be that these problems are still there because of some abnormality in the disbursement of the fund? or could it be that the authority changed with the management of the Fund are callous and corrupt?

Now, assuming that the above questions point to the root of the matter, how can they really be remedied?

1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to determine the impact of education tax fund on tertiary institution in Nigeria. Specific objectives include;

1. To find out how beneficial the education Tax fund has been in the tertiary institution.

2. To explore the problems impending the disbursement of the fund.

3. To find out the solutions to these problems in order to enhance tertiary institutions.

1.4 RESEARCH QUESTIONS

1. How has the Education Tax Fund benefited tertiary institutions in Nigeria?

2. What is the primary challenges hindering the effective disbursement of the Education Tax Fund to tertiary institutions?

3. What solutions can be proposed to address these challenges and improve the utilization of the Education Tax Fund for enhancing tertiary education in Nigeria?

1.5 RESEARCH HYPOTHESES

1. H1: The Education Tax Fund has significantly contributed to the improvement of infrastructure, facilities, and academic resources in tertiary institutions across Nigeria.

H0: There is no significant impact of the Education Tax Fund on the enhancement of infrastructure, facilities, and academic resources in tertiary institutions across Nigeria.

2. H1: Inefficient bureaucracy, corruption, and mismanagement are significant factors impeding the timely and equitable disbursement of the Education Tax Fund to tertiary institutions.

H0: Inefficient bureaucracy, corruption, and mismanagement do not significantly affect the timely and equitable disbursement of the Education Tax Fund to tertiary institutions.

3. H1: Implementing transparent governance structures, accountability mechanisms, and stakeholder engagement strategies will lead to more effective utilization of the Education Tax Fund and improvements in tertiary education outcomes.

H0: Implementing transparent governance structures, accountability mechanisms, and stakeholder engagement strategies will not lead to more effective utilization of the Education Tax Fund and improvements in tertiary education outcomes.

1.6 SIGNIFICANCE OF THE STUDY

It is envisaged that this study will enable the government, students and the society at large to be acquainted with the numerous benefits of the Education Tax Fund (ETF) rewards alleviating the plight of academic pursuit in our tertiary institutions.

The finding will enable the society to know the various problems military against the disbursement of this fund since its inception or origin.

1.7 SCOPE OF THE STUDY

The scope of the study on "The Impact of Education Tax Fund on Tertiary Institutions in Nigeria" will focus specifically on the Federal University of Technology Minna (FUT Minna) located in Niger State. The study will examine the utilization of the Education Tax Fund (ETF) within FUT Minna, assessing its effectiveness in improving infrastructure, facilities, academic resources, and overall educational outcomes. Additionally, the scope will encompass an investigation into the challenges encountered in the disbursement and utilization of the ETF within FUT Minna, including issues related to bureaucracy, accountability, and transparency. By concentrating on FUT Minna, the study aims to provide a detailed and context-specific analysis of the impact of the ETF on tertiary education within the Niger State region.

1.8 LIMITATIONS OF THE STUDY

The limitations of the study include potential challenges in generalizing findings beyond FUT Minna, Niger State, as the study focuses on a single institution. Additionally, constraints in accessing comprehensive and up-to-date data on the utilization of the Education Tax Fund (ETF) within the university may impact the depth and accuracy of the analysis. Furthermore, the study's reliance on self-reported data and survey methodologies may introduce biases or limitations in capturing the full extent of issues related to the disbursement and utilization of the ETF.

1.9 DEFINITION OF TERMS

1. Education Tax Fund (ETF): A government initiative in Nigeria aimed at providing additional funding for the improvement of infrastructure, facilities, and academic resources in tertiary institutions through a tax levy imposed on companies operating in Nigeria.

2. Tertiary Institutions: Refers to universities, polytechnics, colleges of education, and other higher education institutions offering undergraduate and postgraduate degree programs.

3. Impact: The measurable effect or influence of the Education Tax Fund on various aspects of tertiary institutions, including infrastructure development, academic quality, student performance, and institutional capacity.

4. Funding Allocation: The process of distributing funds from the Education Tax Fund to tertiary institutions based on predetermined criteria, priorities, and budgetary allocations.

5. Infrastructure Development: The construction, renovation, or improvement of physical facilities such as classrooms, laboratories, libraries, hostels, and administrative buildings within tertiary institutions.

6. Academic Resources: Refers to educational materials, equipment, and facilities necessary for teaching, learning, and research activities in tertiary institutions, including textbooks, computers, internet connectivity, and scientific instruments.

7. Accountability: The obligation of tertiary institutions to transparently and efficiently manage and utilize funds received from the Education Tax Fund, ensuring that resources are allocated effectively and in accordance with established guidelines and objectives.

8. Governance Structures: Refers to the organizational framework, policies, and procedures governing the management and administration of tertiary institutions, including decision-making processes, leadership roles, and institutional governance mechanisms. 

9. Stakeholder Engagement: Involves the active involvement and participation of various stakeholders, including students, faculty, staff, government agencies, and the private sector, in the planning, implementation, and evaluation of projects funded by the Education Tax Fund.

10. Transparency: The principle of openness, accountability, and disclosure in the management and utilization of funds from the Education Tax Fund, ensuring that stakeholders have access to relevant information and can monitor the progress and outcomes of funded projects.

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