The Federal Government of Nigeria on Monday said members of the Academic Staff Union of Universities (ASUU) were previously underpaying Pay As You Earn (PAYE) Tax which runs into billions of naira in the past years.
Explaining why university lecturers in the country have been receiving reduced salaries, following the introduction of the Integrated Payroll and Personnel Information System (IPPIS), the Accountant General of the Federation (AGF), Ahmed Idris, on Monday in a statement disclosed that, “the rate of tax being applied by tertiary institutions was not correct, leading to underpayment of PAYE Tax.”
As a result of the underpayment, the AGF revealed that, “state governments made claims on the Federal Government to pay the differential arising from underpayment of tax by these institutions.”
The AGF in the statement 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.
“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.”
On the demand for Bank Verification Number (BVN) from ASUU members before they can be paid, the OAGF said that about 1,180 ASUU members “failed the BVN test and details have been forwarded to the universities for the necessary correction and update.”