FG Implements 40% Deduction from Varsities’ IGR

The Federal Government has initiated a policy to deduct 40% of internally generated revenues (IGR) from federal universities and other partially-funded institutions. This directive aligns with a Finance Circular issued on December 20, 2021, limiting the annual budgetary expenditure from IGR.

The policy, which was communicated to universities via a letter from the Federation’s Accountant-General, Mrs. Oluwatoyin Madein, is titled ‘Implementation of 40% Automatic Deduction from Internally Generated Revenue of Partially Funded Federal Government Institutions.’ The letter, dated October 17, 2023, was issued to university vice-chancellors and was approved by Wale Edun, Minister of Finance and Coordinating Minister of the Economy. It was signed by Felix Ore-ofe Ogundairo, Director of Revenue and Investment at the Office of the Accountant-General of the Federation.

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According to Ogundairo, the policy is in conformity with Section 62 of the Finance Act, 2020, and would go into force in November 2023. It mandates these institutions to send to the Sub-recurrent Account 100% of their statutory revenue lines such as Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, and Rent on Quarters.

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The new policy seeks to regulate and streamline budgetary expenditure from IGR sources, which are viewed as an important source of income for these organizations. It is expected to improve financial management and offer consistency to budget standards among federally supported organizations.

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