President Bola Tinubu has announced the cancellation of the automotic 40 percent deduction from the internally generated revenue (IGR) of federal universities into the federal government’s account.
According to the President, the policy implementation was stopped following the economic challenges being faced in the country inclusive of the universities that “are struggling.”
Making the disclosure at the University of Ibadan’s 75th Founder’s Day on Friday, Tinubu, however, pledged his administration’s commitment to the reform of the nation’s education sector as the bedrock for national development.
“The 40% IGR automatic deduction policy stands cancelled. This is not the best time for such a policy since our universities are struggling,” Tinubu, represented by the Minister of Education, Prof.Tahir Mamman, said.
Persecondnews recalls that a memo dated October 17, 2023, had directed that starting this November, the government would automatically deduct 40% of the internally generated revenues deposited in university accounts through the Treasury Single Accounts (TSA).
The memo with reference no. R&I/2045/T/252, and signed by the Director of Revenue and Investment Department, Felix Ogundairo, disclosed that the decision, which affects all partially funded government agencies and parastatals including universities, is in line with the provisions of Section 62 of Finance Act 2020.
The memo reads in part: “It is important to emphasise that this policy of 40% auto deduction of gross IGR is in line with the Finance circular reference no. FMFBNP/OTHERS/IGR/CRF/12/2021/ dated 20th 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% 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% to sub-recurrent accounts.”