Tinubu Cancels 40% IGR Deduction from Universities

The contentious practice of taking 40% of internally generated revenue from federal colleges across the nation has been discontinued by President Bola Tinubu.

Speaking on Friday at the University of Ibadan’s 75th Founder’s Day celebration, the President—who was accompanied by Minister of Education Tahir Mamman—described the implementation of the policy as “ill-timed.”

Furthermore, he insisted that given the state of our universities, now was not the ideal time to implement such a strategy.

As the cornerstone of national prosperity, Tinubu vowed in his speech as a visitor to the institution to change the country’s educational system.

He said, “The 40 per cent IGR automatic deduction policy stands cancelled. This is not the best time for such a policy since our universities are struggling.”

According to Gistlover, the federal government stated that it would start the deduction in November 2023 in a letter headed “Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions,” dated October 17, 2023.

In a letter dated December 20, 2021, and signed by Felix Ore-ofe Ogundairo, the Accountant-General of the Federation, Mrs. Oluwatoyin Madein, Director of Revenue and Investment, stated that the auto-deduction policy of gross IGR was compliant with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021.

Reacting, the Committee of Vice Chancellors of Nigerian Universities has written a protest letter to the Federal Government, demanding that the government rescind the plan to deduct 40 per cent of the Internally Generated Revenues of federal universities.

Prof. Yakubu Ochefu, the Secretary-General Committee of Vice-Chancellors of Nigerian Universities, revealed this to our correspondent over the phone over the weekend. He added that since the government had denied the universities autonomy, it was not reasonable for it to want 40% of their IGR.

In an interview with our correspondent, Ochefu stated that parents would be responsible for the consequences if the Federal Government ignored the VCs’ petition and proceeded with the program.

Ochefu explained that the Finance Act 2020 specified that 40 per cent could only be sent to the FG if there was a surplus, saying in the case of universities, there was no surplus but a lack of funding because universities only get user charges from students and not profits or revenues.

He said, “If you look at the Act, it didn’t say 40% IGR, but a surplus. So, who determines what is surplus? The Finance Act of 2020 is explanatory, and it is the institution that is supposed to decide and send you the surplus if there is any.

But FG says it now wants to deduct it from the source. We have protested and written to the Ministry of Education. If they insist, it means they want to ground the universities to a halt. Or we will be forced to add the 40 per cent to what we are charging the end users and these end users are complaining already. We told the Ministry of Education to write the Ministry of Finance to halt the development. The letter was written on Thursday.”

Meanwhile, the Academic Staff Union of Universities also kicked against the requirement that the public tertiary institutions remit 40 per cent of IGR to FG.

Following its National Executive Meeting, ASUU, in a statement signed by its president, Emmanuel Osodeke, said the decision would impoverish the already public universities.