Tinubu cancels 40% IGR deduction from universities

President Bola Tinubu has succumbed to the cry from different quarters and stopped the 40% deduction from universities’ Internally Generated Revenue (IGR).

Speaking at an ongoing 75th Founder’s Day ceremony at the University of Ibadan (UI), on Friday, the president said 40 percent automatic deductions from IGR are inappropriate at this period.

Represented by the Minister of Education, Prof. Tahir Mamman, the visitor to the nation’s premier president pledged his commitment to the reform of the education sector as the basis for national development.

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

Recall that the Federal Government, in a letter dated October 17, 2023, tagged “Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions,’ said it would begin the deduction with effect from November 2023.

The letter, which was signed by the Accountant-General of the Federation, Mrs. Oluwatoyin Madein, and the Director of Revenue and Investment, Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo, said the auto-deduction policy of gross IGR was in line with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.

This, however, generated a lot of uproar by tertiary institutions, especially when the institutions have maintained that they are underfunded.

Reacting, President of Colleges of Education Academic Staff Union (COSEAU), Dr. Smart Olugbeko, said there was no basis to apply this directive to the Colleges of Education because revenues collected in the Colleges are meager charges meant for the discharge of specific services.

“In other words, Federal Colleges of Education do not generate IGR. What they charge are service charges for student identity cards, health clinic services, hostel maintenance, laboratory equipment, teaching practice, consumables, etc.,” he said.

He said it is necessary to note that the aforementioned charges cover for government inefficiency as these services are not being funded by the government.

“Following the monetisation policy of 2003, the Government basically stopped paying for outsourced services such as cleaning, grass-cutting, facility maintenance, and security, which are supposed to be government responsibilities.”

“Government only gives the Federal Colleges between an average of N8 million monthly to run the Colleges and this fund is not always made available as and when due, creating serious challenges in running the institutions,” he added.

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