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Redeemer’s University says FG owes it $375,000 – despite the subsidies it gets from the FG

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Redeemer’s University says FG owes it $375,000 – despite the subsidies it gets from the FG

At a pre-convocation lecture on Monday, the Vice-Chancellor of the Redeemer’s University, Ede, Prof. Zacheus Adeyewa, said that the Federal Government is owing the institution the sum of $375,000, which it reportedly spent on research aimed at preventing the spread of the deadly Ebola virus in the country in 2014.

“We spent $375,000 during the Ebola crisis and the government has not returned the money to us. They say we are a private university, but they have not answered the question whether Ebola, Yellow fever and other infectious diseases are private. Why did they cheat us with this public, private dichotomy? Please, help us to tell them to refund our money,” Adeyewa said.

Some good work: The Redeemer’s University and its African Centre of Excellence for Genomics of Infectious Diseases have done some good work and are highly rated. According to the VC, they “developed Rapid Test Kits that could detect Ebola and Lassa fever viruses within 10 minutes. Our Ebola Rapid Diagnostic test kit has been approved for use by the United States Food and Drug Administration and World Health Organisation.”

The big question: While it is agreed that the university contributes to the body of knowledge and its research must impact on the well being of society, does this mean the FG is under any obligation to hand over $325,000 to the private institution? Well, consider the following:

  • The government already heavily subsidises private universities. Under the provisions of the Companies Income Tax Act (‘CITA’), the profits from companies engaged in ecclesiastical, charitable or educational activities of a public character are exempt from tax. So, a huge school like Redeemer’s University (owned by the equally tax-exempt Redeemed Christian Church of God) doesn’t pay taxes.
  • The fees paid in these schools are quite expensive. There are some who argue that the exorbitant fees should disqualify some private schools from their tax exempt status because such educational activities are no longer “of a public character”. The 5th Schedule to CITA defines ‘public character’ as being for ‘the benefit of Nigerians in general and particularly the public.
  • In 2015, the Federal Inland Revenue Service (FIRS) assessed American International School (AIS) in Lagos for Companies Income Tax (CIT) and Education Tax for the years 2008 to 2013. The school dragged the FIRS to the Tax Appeal Tribunal, arguing that it is engaged in providing educational activities of a public character and is therefore exempt from paying the taxes assessed by the FIRS. Despite the argument of the FIRS that the fees by the school are so high that it limits its services to only a few and therefore no longer of a public character, the school won that case.
  • Also please note that donations/endowments to schools like Redeemer’s University are tax deductible.

So, with all of these tax supported aid to private institutions, is the Redeemer’s University still right to argue that government should make refunds to it for research done for the public good? Is research not one of the objectives of a university? If a private university requires government to pay for a key objective of its founding, can it still lay claim to being private?

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