…PAC seeks AGF’s legal opinion as revenue agency insists deductions are lawful
By Gloria Ikibah 
The House of Representatives Public Accounts Committee (PAC) has intervened in a dispute between the Nigeria Revenue Service (NRS) and the Tertiary Education Trust Fund (TETFund) over the deduction of N123.48 billion as 4% cost of collection on Education Tax revenue.
The disagreement centres on whether the NRS, formerly the Federal Inland Revenue Service (FIRS), was legally entitled to deduct the 4% charge from the entire Education Tax collected from companies in both the oil and non-oil sectors.
The dispute came before the committee, chaired by Rep. Bamidele Salam, during its ongoing consideration of audit queries relating to revenue collections and remittances.
Officials of the two agencies presented opposing interpretations of the relevant legal provisions, with the NRS represented by its Executive Director, Shettima Tamadi, and TETFund by its Director of Finance and Accounts, Dr Gloria Olotu.
The committee was informed that the Auditor-General had identified discrepancies between the Education Tax collected by the NRS and the amount remitted to TETFund, prompting an examination of the deductions made as cost of collection.
Presenting TETFund’s position, Olotu argued that the four per cent cost-of-collection charge should apply only to non-oil revenue and not the entire Education Tax collected from companies operating in both sectors.
She explained that the issue was initially raised by the Auditor-General, prompting the Fund to review the deductions and discover that the NRS had applied the charge to the total Education Tax without excluding the oil revenue component.
According to her, calculations based on figures supplied by the NRS, which separately identified the oil and non-oil components, showed that excess deductions between 2012 and 2024 amounted to exactly N123,486,953,796.24.
Olotu told the committee that TETFund had written several letters to the revenue agency seeking a resolution and refund of the disputed amount but had yet to receive the money.
However, defending the deductions, Tamadi maintained that the NRS was not liable to refund any amount, citing Sections 15A and 69 of the NRS Act.
He argued that Section 69 defines non-oil revenue as all revenue other than proceeds derived from Petroleum Profits Tax (PPT).
On that basis, the NRS maintained that Education Tax paid by oil companies does not constitute Petroleum Profits Tax and is therefore subject to the four per cent cost-of-collection deduction.
The NRS official further explained that oil companies pay Petroleum Profits Tax separately, adding that the agency does not deduct collection charges from such payments.
Despite the explanations, the committee observed that although the NRS interpretation appeared straightforward from an ordinary reading of the relevant provision, the dispute required an authoritative legal clarification.
The lawmakers consequently insisted on obtaining the legal position of the Attorney-General of the Federation (AGF) before reaching a decision.
TETFund informed the committee that it had already sought the Attorney-General’s opinion on the matter and promised to forward the response for consideration.
The committee, however, resolved to independently seek the AGF’s legal advice to establish the correct interpretation of the law and determine whether the disputed deductions should be refunded.
It noted that although the legislation appeared to provide a definition of non-oil revenue, the disagreement between the two government agencies over its application to Education Tax required further clarification.
The hearing was subsequently adjourned pending the submission of written positions requested from TETFund and the legal advice of the Attorney-General of the Federation.
