Federal Government Begins Implementation Of New Tax-free Allowances For Varsities

The Federal Government has asked universities to commence the payment of the tax-free Consolidated Academic Tools Allowance across the country.

Minister of Education, Dr. Tunji Alausa, who disclosed this in a memo sent to all federal Universities, said it was in fulfillment of the agreement reached between the Federal Government and university lecturers recently.

The allowance, which ranges from a little over N1million annually for graduate assistants and assistant lecturers to over N3million for professors, is expected to bump up the take-home pay of university teachers.

The Minister said all federal universities were to begin the payment of the Consolidated Academic Tools Allowance (CATA) to academic staff, even as the 2026 budget approval process continues.

Emphasising the need to commence the payment, Dr Alausa noted that the tax-free allowance was part of the executed FGN-ASUU 2025 Agreement.

He said, “The payment of this allowance is explicitly captured in the executed FGN-ASUU 2025 Agreement, which has been duly circularised by the National Salaries, Incomes and Wages Commission with effect from 1st January 2026.”

He directed federal university authorities to mobilise available resources to ensure prompt implementation.

“I request that all university authorities utilise available resources to ensure the approved CATA is paid without delay, in full compliance with the NSIWC circular and the provisions of the FGN-ASUU Agreement,” he stated in the memo.

The Minister also highlighted the broader impact of timely payment, adding, “The prompt implementation of this allowance will demonstrate the Federal Government’s commitment to honouring duly negotiated agreements, promote industrial harmony, boost staff morale, and strengthen the academic environment of our universities.”

Copies of the directive were also sent to the Executive Secretary of the National Universities Commission, alongside all vice chancellors of federal universities, for information and immediate action.

The Consolidated Academic Tolls Allowance (CATA) is a specific financial component of the salary structure for University Academic Staff in Nigeria. It was done by the Tinubu administration as a job-specific, tax-exempt allowance that supports the core research, teaching, and intellectual activities of university academics.

With the new FG agreement with university teachers, CATA is part of a Dual Salary Structure. Now, university academic staff salaries are split into two main parts, the CONUASS (Consolidated University Academic Staff Salary): The base salary, which is subject to standard tax rules and CATA (Consolidated Academic Tools Allowance): A separate, additional allowance intended for work-related tools and activities.