The Federal Government has begun the implementation of an automatic 40 percent deduction of Internally Generated Revenues (IGR) of Federal Universities and other partially funded institutions across the country.
The auto-deduction policy of gross IGR is in line with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.
The circular limits the annual budgetary expenditure from IGR of the partially funded federal government institutions.
This was contained in a letter dated October 17, 2023, and titled ‘Implementation of 40 percent automatic deduction from internally generated revenue of partially funded federal government institutions’ by the Accountant-General of the Federation, Mrs Oluwatoyin Madein, to the universities and signed by director of Revenue and Investment, Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo.
The letter referred to universities vice-chancellors was assented to by the Minister of Finance, Wale Edun.
“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 percent 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 are not to spend more than 50 per cent of their gross IGR and the remittance of 100 percent of the remaining 50 percent 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.
Earlier, the federal government through the Minister of Education, Tahir Mamman, said it was giving varsities full autonomy to explore sources of financing their activities.