The Federal Government has officially launched the implementation of a policy for an automatic 40% deduction from Internally Generated Revenues (IGR) of Federal Universities and other partially funded institutions across the nation. This development is in line with the Finance Circular bearing reference number FMFBNP/OTHERS/IGR/CRF/12/2021, dated December 20, 2021.
The circular has set a cap on the annual budgetary expenditure from the IGR of these partially funded federal government institutions.
This significant development was communicated in a letter dated October 17, 2023, titled ‘Implementation of 40% Automatic Deduction from Internally Generated Revenue of Partially Funded Federal Government Institutions.’ The letter was sent by the Accountant-General of the Federation, Mrs. Oluwatoyin Madein, to the universities and was signed by the director of Revenue and Investment from the Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo. The Minister of Finance, Wale Edun, endorsed this letter.
The letter addressed to the vice-chancellors of the universities stated, “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 the Finance Act, 2020, with effect from November 2023.
“In compliance with this directive, agencies and parastatals are allowed to retain not more than 50% of their gross IGR and are required to remit 100% of the remaining 50% to the Sub-recurrent Account. All statutory revenue lines, such as Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, Rent on Quarters, etc., shall be remitted 100% to the Sub-recurrent Account.
“Consequently, all partially funded agencies and parastatals must align their budget requirements and ensure total compliance with the provisions of Section 62 of the Finance Act, 2020, and the Finance Circular, 2021,” expressed Ogundairo.
Earlier, the federal government, through the Minister of Education, Tahir Mamman, had expressed its intention to grant universities full autonomy to explore various sources of financing for their activities.