President Bola Tinubu has cancelled the 40 per cent automatic deductions from internally generated revenues (IGR) of federal universities.
Tinubu announced the development on Friday at the ongoing 75th Founder’s Day ceremony at the University of Ibadan (UI).
In his speech as the Visitor to the nation’s premier university, Tinubu, who was represented by the Minister of Education, Tahir Mamman, reaffirmed his commitment to the reform of the education sector as the base for national development.
Tinubu said, “The 40 per cent IGR automatic deduction policy stands cancelled. This is not the best time for such policy since our universities are struggling.”
“We know that this law was enacted in 2020 and the circular was issued in 2021, but this is not a good time for such policy,” he said.
Tinubu reiterated its commitment to the education sector in line with the 2030 education agenda of the government and African Union goal 2063.
He said “The Federal Government is bringing more innovation to reform the entire education sector for curriculum review at all levels from primary to basic education with the reintroduction of skills to attend to out-of-school menace.”
The president noted that the introduction of students’ loans was to ensure that no student was left out of education due to poverty.
About policy
A leaked memo addressed to the heads of the universities recently by the Nigerian government noted that commencing from November, universities will have 40 per cent of revenues generated internally and deposited in their accounts will be deducted automatically by the government via the Treasury Single Accounts (TSA).
A copy of the memo addressed to the office of the vice-chancellor of the University of Abuja by the Revenue and Investment Department of the Office of the Accountant General of the Federation in the Federal Ministry of Finance, notified the institution of automatic deduction of 40 per cent of its IGR by the government.
Dated 17 October with reference R&I/2045/T/252, and signed by the Director of Revenue and Investment Department, Felix Ogundairo, the letter noted 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 per cent auto deduction of gross IGR is in line with the Finance Circular Reference Number 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 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 instructed the universities and other affected agencies of the government to align their budgets to the new realities.
