By Tony Obiechina, Abuja
The Federal government has commenced the process of vertical review of the present Revenue Allocation Formula, the Chairman of the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), Mr Elias Mbam has announced.
Confirming the development at a press briefing in Abuja on Tuesday, the Chairman said the revised Formula will be presented to President Muhammadu Muhammadu in December, 2021.
According to him, the last general review of the Revenue Allocation Formula was carried out over twenty – eight years ago (1992), hence the need to embark on the exercise.
He also stated that another major consideration that necessitated the review is that “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″, adding that”correspondingly, the number of Local Governments also increased from 589 to 774”.
Mbam said, “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; Inadequate/decaying infrastructure and heightened widespread internal security challenges across the country”.
He also listed as reasons for the Revenue review, ecological challenges like global warming, desertification, flooding and population explosion; 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 a review by various interest groups including States and Local Governments.
The Chairman explained that the current sharing arrangement is as follows:
*Federal Government (Including Special Funds) – 52.68%
*State Governments – 26.72%
*Local governments -20.60%
*Total – 100%
According to him, the federal Government share of 52.68% is distributed as follows:
*Federal Governments Consolidated Revenue Fund (CRF) – 48.50%
*Federal Capital Territory (FCT) -1.00%
* Development of Natural Resources – 1.68%
* Ecological Fund -1.00%
* Stabilization Fund -0.50%
