The Federal Government on Friday announced the suspension of the automatic deduction of forty per cent from the Internally Generated Revenue (IGR), of tertiary institutions.
President Bola Tinubu announced the suspension of the policy at the seventy-fifth Founder’s Day ceremony of the University of Ibadan
represented by the Minister of Education, Tahir Mamman, president Tinubu who is the Visitor to the University, describing the policy as ill-timed.
“The 40 per cent IGR automatic deduction policy stands cancelled. This is not the best time for such policy since our universities are struggling,” he declared.
Last week, it emerged that the government was set to begin implementing a 40 per cent automatic deduction from internally generated revenues of federal universities and other partially funded institutions.
The development is coming amid a crumbling economy and poor funding of the nation’s tertiary institutions, with stakeholders expressing concerns about the policy’s negative impact.
The leaked memo from the Revenue and Investment Department of the Office of the Accountant General of the Federation in the Federal Ministry of Finance notified the institutions of the government’s automatic deduction of 40 per cent of its IGR from November.
The letter dated 17 October with reference R&I/2045/T/252, and signed by the Director of Revenue and Investment Department, Felix Ogundairo, noted that the decision, which affects all partially funded government agencies and parastatals, including universities, was in line with the provisions of Section 62 of Finance Act 2020.
“It is important to emphasise that this policy of 40 per cent auto deduction of gross IGR is in line with the Finance Circular Reference Number FMFBNP/OTHERS/IGR/CRF/12/2021/ dated 20 December 2021, limiting the budgetary agencies or parastatals to not more than 50 per cent of their gross IGR and the remittance of 100 per cent of the remaining 50 per cent to the sub-recurrent account. While all statutory revenue lines like Tender fees, contractors’ registration fees, disposal of fixed assets, rent on quarters, etc., shall be remitted 100 per cent to sub-recurrent accounts,” the memo partly read.
