- States to Push for New Revenue Allocation Formula
Members of the Federation Accounts Allocation Committee have commenced discussions on the review of the current revenue allocation formula among the three tiers of government.
The Chairman, FAAC Commissioners of Finance Forum, Mahmoud Yunusa, confirmed this at a press briefing shortly after the committee’s meeting held on Wednesday at the headquarters of the Ministry of Finance in Abuja.
The briefing was attended by the Permanent Secretary, Ministry of Finance, Mahmoud Dutse, and the Accountant-General of the Federation, Alhaji Ahmed Idris, among other top officials of the government.
The formula currently being used by the Revenue Mobilisation Allocation and Fiscal Commission was first enacted in 1982 before it was brought into operation at the inception of the Fourth Republic in 1999, with necessary amendments.
Based on the revenue allocation formula released by the RMAFC, the Federal Government gets 52.68 per cent of statutory allocation; states, 26.72 per cent; local government councils, 20.6 per cent; while 13 per cent is allocated to the oil producing states based on the derivation principle.
For Value Added Tax revenue, the Federal Government gets 15 per cent; states, 50 per cent; while the local government councils get 35 per cent.
But Yunusa, who is the Commissioner for Finance representing Adamawa State at FAAC, said the states had started to push for a review of the formula to reflect current economic realities.
He stated, “The revenue sharing formula is where discussion has commenced within us to see how we can be able to have a realistic and justifiable review of the revenue sharing formula.
“The real Nigerians are the ones that reside in the states and local governments and we want the states and local governments to have more revenues so that they will work for the people, so that people will feel the impact and the presence of government.
“We will push for the revenue sharing formula to be reviewed and I think at the appropriate time, we will make the announcement.”
Dutse, who also spoke at the event, explained that the Federation Account recorded increase in revenue collection during the month of April.
He said that all revenue lines from revenue generating agencies such as the Nigerian National Petroleum Corporation, Federal Inland Revenue Service and the Nigeria Customs Service recorded increases.