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From Isaac Anumihe, Abuja
Twenty-eight years after the last revenue formula, Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engineer Elias Mbam, yesterday, vowed to give Nigerians a new revenue formula before the end of this year.
Speaking in Abuja, to announce the commencement of the review of the subsisting revenue formula, Mbam, said that the last review of the revenue allocation was carried out in 1992.
According to him, Part 1, Paragraph 32 (b) of the third schedule to 1999 constitution (as amended), empowers the commission to review from time to time, the revenue allocation formula and principles in operations to ensure conformity with changing realities, provided that any formula which has been accepted by an act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the act.
To this effect, he said, the current revenue would be focused on the vertical allocation of the revenue allocation formula which deals with the formula for the allocation to federal, states and local governments.
The review, Mbam, noted, is necessitated by the fact that the last review took place 28 years ago and the political structure of the country has since changed with the creation of six additional states in 1996, which brought the number of stages to 36. This, also, he explained increased the number of local governments from 589 to 774.
Other reasons include, change 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 and primary health care; inadequate/decaying infrastructure and heightened widespread internal security challenges across the country; ecological challenges like global warming, desertification, flooding and population explosion.
The reasons also are: the 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 review by various interest groups including states and local governments.
However, the current sharing formula, according to the chairman, include, Federal Government, 52.68 per cent; state governments, 26.72 per cent; local governments, 20.60 per cent.
“The Federal Government’s share of 52.68 per cent is distributed as follows: Federal Governments Consolidated Revenue Fund (CRF),
48..50 per cent; Federal Capital Territory (FCT), 100 per cent; Development of Natural Resources, 1.68 per cent; Ecological Fund, 1.00 per cent and Stabilisation Fund, 0.50 per cent” he said.
The chairman recalled that the commission has made several failed attempts to actualise the review of the revenue allocation formula. The efforts, he noted, include, proposal for new revenue allocation formula for three tiers of government (federal, states and local governments).
“This was first made by the commission in August, 2001 but the recommendation was withdrawn due to the compelling verdict of the judgement of the Supreme Court on Suit No SC 28/2001 of 5th April 2002 which recognised the beneficiaries of the federation account as federal, states and local governments.
” In December 2002, another proposal for a new revenue allocation formula was presented to the then president, Federal Republic of Nigeria. That formula got to the verge of being passed but again, the bill elapsed with the expiration of the tenure of the then National Assembly in May 2003.
“Furthermore, in 2003, attempts were made by the National Assembly to reconsider the revenue formula bill initially submitted, but the efforts were not successful. However, an addendum to the original report was prepared and resubmitted to the National Assembly in September, 2004.
“The proposed Revenue Allocation Formula passed through several processes both in the senate and especially at the House of Representatives, where a public hearing was conducted in 2006 on the subject. Yet, the formula could not see the light of the day.
“Similarly, the commission in 2014, made concerted efforts to review the formula. All necessary processes required of the commission were concluded. However, the final process was inconclusive” he said.
