The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has said the new revenue allocation formula will be presented to President Muhammadu Buhari by the end of 2021.
The Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engr. Elias Mbam, made this disclosure, in Abuja at a briefing on the proposed new revenue allocation formula.
Mbam assured that “the new formula will meet yearning and expectations of three tiers of governments”.
The RMAFC chairman noted that “the formula which is being reviewed is targeted at equitable distribution of the accrued revenue into the Federation Account to the three tiers of government and this will be concluded before the end of 2021”.
Some of the reasons for embarking on the proposed new revenue formula, Mbam said, include, “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 etc.
“Inadequate/decaying infrastructure and heightened widespread internal security challenges across the country. Ecological challenges like global warming, desertification, flooding and population explosion; and
“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.”
Mbam said the current vertical revenue formula being used by the three tiers of government was reviewed and passed into law 28 years ago.
The age of the revenue formula in use, he said, has made it imperative for a new revenue formula “for these various reasons”.
