VOICE AIR MEDIA News Update

President Bola Tinubu has announced the cancellation of the automatic deduction of 40 per cent from the internally generated revenues of federal universities.

He says the policy implementation is ill-timed.

Tinubu spoke on Friday at an ongoing 75th Founder’s Day ceremony of the University of Ibadan (UI). He was represented by the Minister of Education, Tahir Mamman.

In his speech as the Visitor to the university, Mr Tinubu pledged his commitment to the reform of the nation’s education sector as the bedrock for national development.

Recall that 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.