Elias Mbam, chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) says a new revenue formula that will address unfolding realities in the country will be put in place.
Under the current revenue sharing formula, the federal government takes 52.68 percent, the states take 26.72 percent and the local governments get 20.60 percent, with 13 percent derivation revenue shared to the oil-producing states.
Evaluating the engagements the commission has had with stakeholders across the country, Mbam said there’s need for a new and acceptable revenue formula that will tackle new development realities in the country.
He said it was being proposed that the federal government’s allocation be reviewed downward from 52.68 percent to 50.65 percent, states from 26. 72 percent to 25.62 percent, with allocation for derivation remaining at 13 percent.
“Development needs to start getting to the local governments for the nation to get fully developed,” he said.
“It is an important fact that this review should culminate in improved national development.”
The chairman of the commission said the various zonal public hearings serve as a reassurance that the revenue allocation review had no plans to alter the fiscal arrangement of the country.
“Whether we are devolving power or going into a complete system of federalism or we are restructuring is not the concern of this review,” he said.
“The review of the mobilisation and revenue allocation is a product of law and an Act provided by the 1999 Constitution as amended.”
He said the three tiers of government would receive revenues according to their legal obligations.
“If the federal government is confirmed to have a high responsibility, it will get an equivalent of that responsibility as allocation,” he said.