Multiple taxation crippling private schools as operators demand review

Private schools are choking under the heavy tax burden imposed on them by various agencies of government across the states. These taxes range from business premises, waste management agency fees, local government levies, emblems for school buses and signage or billboards, among others.

These taxes are paid yearly to agencies of government sent to enforce them, at times with the services of thugs.

Investigations showed that schools are taxed based on their size. The fees paid range between N50, 000 and N200, 000 depending on the owner’s haggling ability and willingness of enforcers to part with something.

Sources stated that these taxes are demanded irrespective of how long the schools have operated and not more than seven days demand notice is served.

Yomi Otubela, NAPPS President

Kanu listed them to include parking, bus and sewage permits, tenement rate, land use charge, borehole charges, business premises, development levy as well as Lagos State Signage and Advertisement Agency (LASAA), in the case of Lagos State.

While some levies like the development levy are constant and cut across members of staff, Kanu said there are those charges that come arbitrarily.

Such charges, according to Kanu can be about N500, 000 and the school owner would start negotiating with the officials.

“The ones being handled by local government councils like fumigation, officials just slam charges and you pay, forgetting that when you fumigate your school, others in the neighbourhood do not fumigate and ultimately, those things you are running away from by fumigating would still find their way there. In some cases, these officials charge for radio and television, between N10, 000 and N50, 000. Sometimes they take us to court and the magistrate would just rule. We are helpless.”

Kanu said the association raised the issue during the electioneering campaign of Governor Babajide Sanwo Olu and he promised to address them but lamented that since his assumption of office, he is yet to look into it.

For low-cost schools, Kanu said members pay between N100, 000 and N300, 000, apart from Personal Income Tax depending on the location.

He said: “There was a research work done by Developing Effective Private Education Nigeria (DEEPEN), an innovative programme initiated by the UK’s Department for International Development (DFID) to improve learning outcomes in Lagos’ private schools. For five years, they conducted research around what we are doing and discovered that AFED is saving the government over N300b by absorbing the number of children that are supposed to be in government schools.

“Just as the government is paying WAEC fees and providing the infrastructure for those in public schools, they should also be taking care of those ones with us, but we have ended up saving government from those hassles and levies by accommodating them in our own schools, collecting stipends from parents. On that note, we are not in the business for gain, we are just doing it because it is our passion.”

The AFED president called on the government to consider low-cost schools as an extension of their own public schools and spare them from multiple taxes.

Besides, Kanu urged the government to see their effort as a form of social service.

“For any government, the provision of education is compulsory for the citizenry. And if there is anyone assisting the government in doing that, they should be encouraged and given a free hand, possibly a good atmosphere and enabling environment to operate,” Kanu added.

Mrs Cynthia Obioma, Proprietor of Great Minds Academy, a private Nursery, Primary and Secondary Schools in Enugu State told The Guardian that operating a private school was no longer an easy task.

“I could have folded up if I had depended on what comes from the school to run it. Most of the time, I invest resources raised from other areas into the school to keep it going. This is our seventh year in operation but I tell you I have never received the slightest support from the government. I registered the school with N100, 000. That is the official fee charged outside other extortions from government officials.

“Thank God the land is my personal property acquired specifically for the purpose. We put up the structures among other facilities for the children. We employed teachers and by September of that year when we kicked off, more than five demand notices were lined up for me.”

She continued: “ It did not end there. Every week, somebody will come from the directorate for inspection. They complained of every little thing and threatened to close the school. At each visit, I part with something. Now a year after, in an attempt to boost students’ population, I acquired a school bus. They came back and demanded emblem fees. That year, we did not pay because there were no students to carry. One afternoon, the driver went out with the bus, came back, and parked outside the school compound. But officials of the government traced the bus to where it was parked and removed the tyres on the ground that we defaulted in emblem fees. How?

“Now, come to the school, some classes have 10 children, some less than that. You pay a teacher and a nanny. Some students don’t pay or pay late because of poverty. You pay other fees like electricity, run a generator, and provide teaching materials among others. There’s no subvention from anywhere, yet there’s a government you are helping to provide jobs and training for the children, they don’t support what you do but to use you to make money. That is not how a society should be. Do you know that they give Scheme of Work to Public Schools free of charge but private schools are meant to pay? They give the text and notebooks free of charge but we must buy and on each occasion they visit, they ask you to show everything or risked being closed “.

The Proprietor of Early Child Care, Enugu, Mrs Udoka Chukwubuikem, stated that apart from paying the choking taxes when schools resume in the next few weeks, one major challenge they would face is the exit of their teaching staff.

Asked how the government can assist, she said: “ My school is registered with the Ministry of Education; while the COVID-19 lasted, government was paying workers in public schools while those in the private schools were not paid. Government can leverage the fact that the school is registered and pay its teachers.

That way, the government is helping us.

Director of Grace Schools, Gbagada, Lagos, Tokunbo Edun said multiple taxations in private schools is a big problem for operators.

Edun said private school owners pay tax to government and tax officials. “It is like paying tax to two masters,” she said.

Apart from trumped-up taxes from officials at the tax office who see schools as money-making machines without considering that there are so many overheads like salaries, maintenance, electricity bills (that are as high as N1 million a month), diesel purchases, and others, Edun added that schools also have to pay the Ministry of Education an “annual renewal” fee based on how many children you have in school and without the payment of this fee, a school cannot operate.
 

Edun stated that school buses have to carry radio and television licenses, local council mobile advert documentation, and multiple official papers.

Oyo State President of NAPPS, Mr. Kayode Adeyemi said even when private schools were on lockdown, the state government was still giving a demand notice to proprietors. 

“We pay multiple taxes. The school itself pays renewal tax to the state government to the tune of about N130, 000 for the College, N40, 000 for primary and nursery alike. Apart from that, proprietors pay personal income tax to the government while teachers pay PAYE to the government and other sundry levies such as signage and mobile advert rates.

“With half-year gone under lockdown, the government of Oyo State is still serving us demand notices and increasing the rate of taxes. These include environmental taxes, business premises levy. We are being asked to be paying for re-approval and renewal, which is about N130, 000 per annum.”