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Ahmed Idris

IPPIS: Differential In Lecturers’ Salaries Due To Tax Deductions – FG

The Federal Government has explained the reason for the differential in the salaries recently received by lecturers in federal universities across the country.

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Several lecturers have complained about not receiving full salaries in February, March and April, following the implementation of the Integrated Payroll and Personnel Information System (IPPIS) by the Federal Government.

The Academic Staff Union of Universities (ASUU) is currently on strike due to the implementation of the IPPIS platform by the government.

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But in a statement on Monday, Ahmed Idris, Accountant-General of the Federation, said the differences in the lecturers’ salaries were due to deduction of the Pay As You Earn (PAYE) tax.

According to the statement issued on Idris’ behalf by Henshaw Ogubike, Director of Information, Press and Public Relations in the office of the AGF, lecturers had for years being underpaying PAYE tax due to the wrong application of tax rate made by tertiary institutions.

The AGF explained that the deficit in tax payment had been covered by the Federal Government for a long time, adding that the current administration would not sanction the formalisation of tax evasion as demanded by lecturers.

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The statement read: “The attention of the Office of the Accountant General of the Federation (OAGF) has been drawn to series of reports on claims by tertiary institutions unions, led by ASUU, that IPPIS was deducting their salaries and allowances to the extent that their take home is now only 50% or less of what they earn.

“It is pertinent that the Office of the Accountant General of the Federation (OAGF) puts the records straight for the interest of the general public and majority of staff of tertiary institutions that have displayed unparalleled understanding and cooperated with IPPIS till date. We hereby state as follows:

“The Pay As You Earn (PAYE) Tax is a statutory tax deductions paid by all salary earners. IPPIS applied the correct rate in compliance with Section 34 of the 6th schedule on personal income tax (Amendment) Act of 2011. Prior to migration to IPPIS, the rate of tax being applied by tertiary institutions was not correct, leading to underpayment of PAYE Tax.

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“It is important to note that all states governments of the federation made claims on the federal government to pay the differential arising from underpayment of tax by these institutions. The federal government has paid several billions on behalf of these institutions because of their underpayment of PAYE Tax. The request by the tertiary institution unions to formalize tax evasion through IPPIS is not only untenable, but unpatriotic request to violate extant laws on tax.”

Idris also explained that part of the deductions being made from the lecturers salaries would enable them access loans to own their personal houses after retirement.

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“NHF Deductions: The National Housing Fund (NHF) is 2.5% of basic salary. This is another statutory contribution backed by the Act of National Assembly,” the statement read.

“This is a savings contribution by all federal employees to enable them have access to short life loans to own their personal houses. These savings contribution are refundable with interest either at retirement or exit from being an employee of the federal government.

“The ASUU is bringing claims that those laws should not be applicable to them and thereby should be exempted or be made optional for them. The request for breach of Act of Parliament is not within the ambit of the IPPIS or the (OAGF). They have been advised to approach the National Assembly for amendment of the Act.

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“Another issue raised by the unions is the Employees’ Pension Contribution deductions. Employees’ Pension Contribution 7.5%. The ASUU claim that the Employee Contributory Pension should be based on basic salary and not on consolidated salary and it has increased their employee deductions thereby reducing their take home.

“This is a penny-wise argument not expected from Ivory Tower. The Consolidated salary is what is applicable to determine employee’s contribution of all Federal employees’ as Salaries Income and Wages Commission (SIWC) have consolidated salary without the composition. The actual amount contributed by the employee determines what the Government contributes as well. Deduction is in line with the Pension Contributory Act.”

 

 

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