The federal government has begun to adopt an automatic 40% withdrawal from Internally Generated Revenues of Federal Universities and other partly supported institutions around the country.
The gross IGR auto-deduction policy adheres to the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021, issued December 20, 2021.
The circular restricts the federal government’s partially financed yearly budgeted spending from IGR.
News About Nigeria gathered that this was stated in a letter dated October 17, 2023, titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions’ sent to the universities by the Accountant-General of the Federation, Oluwatoyin Madein, and signed by Felix Ore-ofe Ogundairo, Director of Revenue and Investment, Office of the Accountant-General of the Federation.
Wale Edun, Minister of Finance, signed the letter referring to university vice-chancellors.
“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, with effect from November 2023, by the provisions of Section 62 of the Finance Act, 2020.
“Agencies/parastatals must not exceed 50% of their gross IGR and must remit 100% of the remaining 50% to the Sub-recurrent Account. All statutory revenue streams, such as Tender Fees, Contractor Registration Fees, Disposal of Fixed Assets, Quarterly Rent, and so on, must be transferred in full to the Sub-recurrent Account”, Ogundairo conveyed.
He further stated that as a result, all partly financed Agencies/Parastatals must align their budget requirements and achieve comprehensive compliance with Section 62 of the Finance Act, 2020 and Finance Circular, 2021.