The Federal Government of Nigeria has explained why lecturers have been receiving reduced salaries, following the introduction of the Integrated Payroll and Personnel Information System (IPPIS).
Lecturers have complained about not receiving full pay in February, March and April.
The Accountant-General of the Federation, Ahmed Idris, in a statement on Monday, said the IPPIS made the “right deductions”.
Part of the statement signed by Henshaw Ogubike, director, information, press and public relations in the office of the AGF, read: “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.
“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.
“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.
“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.
“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.
“Any other salaries and allowances approved by any other agency in Nigeria which are not formalized by these two agencies will amount to illegal payment. Therefore, ASUU and other unions are expected to understand this. The fact that they arm-twisted their institutions to pay them these allowances does not translate to legality.”