The implementation of an automatic 40 percent deduction from Internally Generated Revenues of Federal Universities and other partially funded institutions across the nation has been set in motion by the Federal Government.
The auto-deduction policy about gross Internally Generated Revenue (IGR) is consistent with the Finance Circular issued on December 20, 2021, under reference number FMFBNP/OTHERS/IGR/CRF/12/2021.
As per the circular, there is a restriction on the annual budgetary expenses that can be covered by the Internally Generated Revenue (IGR) of partially funded federal government institutions.
The Accountant-General of the Federation, Mrs. Oluwatoyin Madein, addressed a letter dated October 17, 2023, titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions,’ to the universities.
The letter was signed by Felix Ore-ofe Ogundairo, the director of Revenue and Investment at the Office of the Accountant-General of the Federation.
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The Minister of Finance, Wale Edun, endorsed the letter sent to the vice-chancellors of universities.
‘I am directed to inform you that the Honourable Minister of Finance and Coordinating Minister of the Economy has approved the implementation of a 40% auto deduction from the Gross Internally Generated Revenue (IGR) of all Partially Funded Federal Government Institutions in line with the Provision of Section 62 of Finance Act, 2020 with effect from November 2023.’
‘Agencies/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. All statutory revenue lines like Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, Rent on Quarters, etc shall be remitted 100 per cent to the Sub-recurrent Account.’
‘Consequently, all partially funded Agencies/Parastatals must align their budget requirements and ensure total compliance with the provision of Section 62 of Finance Act, 2020 and Finance Circular, 2021,’ Ogundairo expressed.
The Minister of Education, Tahir Mamman, representing the federal government, had earlier announced that universities would be given full autonomy to investigate diverse financing sources for their operations.