The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has set December this year as expected period for presentation of a new revenue allocation formula to President Muhammadu Buhari for further action.
The federal government has been on the process of reviewing the revenue allocation template among the three tiers of government. The government said the new one will reflect equitable distribution of financial income into the federation account to the federal, state and local governments.
The chairman RMAFC, Elias Mbam announced the new date for the submission of the formula yesterday in Abuja.
Currently, the federal government gets 52.68 per cent of the total revenue shared; while states, get 26.72 per cent, with local governments getting 20.60 per cent.
Also, Value Added Tax revenue is shared thusly: federal government: 15 per cent; states: 50 per cent; and local governments: 35 per cent.
The current formula being used by the three tiers of government was done 28 years ago, 1992, when Nigeria had 30 states – before the creation of additional six states.
Giving reasons for the review of the current formula, Mbam said “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. Correspondingly, the number of Local Governments also increased from 589 to 774.
“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.”