The Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), on Tuesday disclosed that a revised revenue allocation formula for the three tiers of government would be presented to the Executive by December this year.
The Chairman of the commission, Engr. Elias Mbam, who made the disclosure during a media briefing in Abuja said the review was long overdue since the last general review of the formula was carried out about 28 years ago, precisely in 1992.
According to him, another reason that necessitated the review is that “the political structure of the country has since changed with the creation of six additional States in 1996, which brought the number of states to 36″, adding that ”correspondingly, the number of Local Governments also increased from 589 to 774”.
The RMAFC expatiated: “There have been some considerable changes arising from the policy reforms that altered the relative share of responsibilities of the various tiers of government, including the controversies over funding of Primary education, Primary health care; Inadequate/decaying infrastructure and heightened widespread internal security challenges across the country”.
Mbam also linked the ongoing review exercise to ecological challenges like global warming, desertification, flooding and population explosion; inability of the current vertical formula to adequately address the apparent mismatch between statutorily assigned functions and tax powers of each of the three levels of government; and agitation for a review by various interest groups including States and Local Governments.
The Chairman explained that the current sharing arrangement is Federal Government (Including Special Funds) 52.68%; State Governments 26.72%; Local governments 20.60%
According to him, the Federal Government’s share of 52.68% is distributed into Consolidated Revenue Fund (CRF), 48.50%; Federal Capital Territory (FCT), 1.00%; Development of Natural Resources, 1.68%;
Ecological Fund, 1.00%; and Stabilization Fund, 0.50%.
