FG proposes new revenue sharing formula for Federal, State, LGs
The federal government has agreed to receive less federation revenue, with a proposal to collect 50.65 per cent, down from the present 52.68 per cent.
The Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, gave the federal government position at the Town Hall meeting organized on the New Revenue Formula, in Abuja.
Allocations to state governments, according to the SGF, should also be reviewed downwards 25.62 %, while Local Governments allocation should be increased to 23.73% and Derivation Allocation retained at 13 %.
The present vertical Revenue Allocation Formula is: Federal Government 52.68%; State Governments 26.72%; Local Governments 20.60% and Derivation Formula 13%.
Mr. Mustapha who was represented by the Permanent Secretary, Political and Economic Affairs, Mr. Andrew Adejoh, said that the current administration would implement whatever formula was passed by the National Assembly.
“On behalf of the President, Muhammadu Buhari, I wish to re-assure all Nigerians that the Federal Government will implement the final outcome of the conclusion of this exercise as soon as the National Assembly enacts the relevant legislation to complete the process,” he said
The SGF, said however, that the responsibilities shouldered by each tier of government should guide the Revenue Mobilisation Allocation and Fiscal Commission in the new formula.
Mr. Mustapha said that a lot of the resources allocated to the federal government was spent on providing services that were the responsibilities of state governments.
According to him, “We are all agreed, as Nigerians, that the present Revenue Allocation formula, both vertical and horizontal, is long over-due for a review not only because the last one was done in 1992 but most importantly, contemporary issues since then, such as heightened insecurity, decaying infrastructure, need for appropriately matching statutory functions and tax powers, need to be taken into consideration.
“It is important to restate that revenue allocation should be done constructively in the face of a dwindling national revenue base and the imperative for states to generate their IGR. Equally important is the fact that this review should culminate in improved national development.”
In his remarks, the Minister of the Federal Capital Territory, Mr. Bello Mohammed, asked for more funding of the Federal Capital Territory, in view of its massive developmental needs.
He said, “Because of the massive expansion, for us to be able to develop the city to match the population expansion, we need to have a special funding status and that is our appeal to the commission and I am sure by the grace of God they will work towards it.”
The Chairman of the RMAFC , Engr. Elias Mbam said that his team was working on a formula that would be “tied directly on the responsibility of each tier of the government.”
Vanguard
