The Academic Staff Union of Universities (ASUU) and the Committee of Vice Chancellors of Nigerian Universities have described the plan by the Federal Government to automatically deduct 40 per cent from the Internally Generated Revenue (IGR) of universities in the country as an attack on the university system.
In a letter dated 17th October 2023, and titled ‘Implementation of 40 per cent automatic deduction from internally generated revenue of partially-funded Federal Government institutions’, Federal Government said it would begin the deduction with effect from November 2023.
The letter signed by the Accountant-General of the Federation, Dr. Oluwatoyin Madein, Director of Revenue and Investment, Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo, also 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 20 December 2021.
The National President of ASUU, Prof. Emmanuel Osodeke, insisted that FG’s decision was disheartening, saying universities were not generating any revenue from the user chargers/service fees they gave students.
He argued that it was surprising that the government still wanted to collect from the subsidised charges on ID cards, hostel accommodation, lab coats, etc, of students.
“This is what we saw when we were fighting that the government should fund universities and Nigerians think ASUU is the problem.
“Universities are not revenue-generating agencies, so the 40 per cent of the subsidised money students pay for a hostel, medicals, ID cards, lab coat, chemicals in the laboratory should still be shared with the government?
“This is an extreme, that such is happening in Nigeria.. Will the Presidency ask the NASS, NNPC, to give a return of 40 per cent?”
Osodeke called on parents, students and Nigerians as a whole to rise against what he described as an attack against the universities, adding that ASUU would also meet with the Federal Government agencies in charge of the policy to take the next line of action.
He said, “Parents, students, Nigerians need to rise up to this. This is an attack on universities. Universities are already paying taxes. They pay withholding taxes and it goes to the government. There is nothing like IGR in universities. What we have are charges.
“We need to know the 40 per cent of what they want to collect from universities. They are even saying lecturers should pay them accommodation fees too.
“They want 100 per cent of what they pay as accommodation. It is sad. Give us some time to interact with the government”, Osodeke said.
On his part, the Secretary-General of Committee of Vice-Chancellors of Nigerian Universities, Prof. Yakubu Ochefu, revealed that the amount deducted by the FG from universities was 25 per cent but was increased to 40 per cent recently.
He called on the AGF to specify what it meant by IGR, saying universities only get user charges from students and not profits or revenues.
He added that universities were being run in deficit already, arguing that a deduction of 40 per cent would completely run the universities down.
Ochefu said, “The Federal Government, through the Accountant General of the Federation, is citing the Finance Act of 2021 as the basis for the decision.
“We also have to look at the provision of the law. It says that it is when you have surplus in terms of your Internally Generated Revenue, that is when you can make the return to the government. But many universities don’t have IGR, because most universities charge students’ fees as user charges. Paying N2,000 for an ID card, which has already been subsidised by the university; they pay for health insurance, sports, ICT, and accommodation, these are all the charges that come together and universities must provide all these for their students.
“If a user charge is considered as IGR, then we have a problem with the nomenclature. The accountant general should clearly specify what he was referring to as IGR.
“If it is all these subsidised charges that the government wants to collect 40 per cent, then the universities will lead towards financial catastrophe.
Meanwhile, he insisted that if the Federal Government wished to collect 40 per cent of what universities generate, they should fund the universities fully.
“If this happens, the financial challenges of the universities will get worse because the university is not a profit-making institution, it is not a revenue-generating entity. It is a service-providing entity”.
He also said the committee of VCs would consult with the Ministry of Education, accountant general and others.