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Sunday, 07 January 2018


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The clarification between CLG & LLC is very helpful. I want to add that schools must also bear in mind other applicable levies or contributions which apply, because of the employees and not necessarily having regard to the status of the employer (whether CLG or LLC). E.g. Industrial Training Fund (ITF) and Nigerian Social Insurance Trust Fund (NSITF). for ITF, once you have 5 or more employees or annual turn over of up to N50M, you are liable to make contribution to ITF.

In all, I see that the general perception that schools are tax exempt is a mere perception with a lot of qualifications. Even if you are a CLG and your 'profit' is tax exempt, VAT and others will catch up with you. So, every school inevitably needs tax plan.


Thank you knowledge sharing

Nojeem 'Nudge' Yusuf

@Ilias - Thank you very much for the additional information provided.

Awoyade Olatokunbo

Thanks for the clarification of those taxes that pertains to school. However, this is helpful. I really gained from the write-up . More wisdom. Thank you

Lawal Arishekola

If you intend to set up a school mainly for the purpose of making profit, then you should incorporate a Limited Liability Company (LLC). However, if your intention is to set up a school as an NFP, then you should incorporate a Company Limited by Guarantee (CLG)."

This summarises the whole discussion. I think every school owner should read this before shooting themselves in the foot when the taxman comes for their dues.

Gbenga Idowu

Good Morning Sir,

I do enjoy and learn from your write-up because they are educative to me. I am not a Tax Expert but I have a reservation concerning the payment of VAT on some items mentioned in this write-up. Firstly, I believe that there are reasons for Tax exemption for certain category of schools which one of them is to make education affordable for people. If we say that the school fee (and some school materials such as school uniform etc) should be increased by 5% to accommodate VAT. Don't you think that the purpose of exempting tax in the first place will be defeated? Considering the the rate of OUT OF SCHOOL CHILDREN in Nigeria (by UNESCO) and the poverty level.

I think that the Tax Authorities not looking in this direction is deliberate.

Please I am not expert in this area. I am just taking a broad look at the whole situation as a lay man.

Thank you Sir for your time

Nojeem 'Nudge' Yusuf

@Gbenga Idowu,

Thank you very much for your comments. Yes the fact that the tax authorities are not looking at demanding VAT on school fees is probably deliberate. I personally do not think school fees should be subject to VAT; unfortunately it does not change the fact that the law does not exempt school fees from VAT.

I feel as a professional I have an obligation to enlighten people around me about taxes, so they are adequately guided in the conduct of their affairs.

As ordinary Nigerians, we may be able to propose amendment bills to the National Assembly to accommodate VAT exemption on schools fees. Until then, if the tax authorities come around to demand VAT and for some reasons you don't pay and it ends up in court, the court will rule in their favour.


Thank you Gbenga! This is so enlightening! Please, how do I follow you on other media, like LinkedIn, facebook and the Rest? And also,di you have tax academy for practical classes? I want to add tax preparations experience to my CV, I am an accountant, but never taken up tax roles. 07067012274, kindly add me to groups. Regards.

Nojeem 'Nudge' Yusuf

@Alex', I assume your comment was for me. Please find me on LinkedIn and send me a connection request, I'll be glad to accept your request. I'll be coming up with practical tax classes, ones in a while; the first will be coming up soon. Pls watch this blog and my LinkedIn page for updates.

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