Engr. Elias Mbam, Chairman of RMAFC

RMAFC presents new revenue allocation formula to Buhari in December: Official

*The Revenue Mobilisation Allocation and Fiscal Commission assures the new revenue allocation formula will meet the yearnings and expectations of the three tires of the Nigerian Government

Alexander Davis | ConsumerConnect

In view of a significant change in the political structure of the country over time and the need to change the current ‘vertical formula’, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has disclosed its readiness to present a new revenue allocation formula to President Muhammadu Buhari by the end of 2021.

ConsumerConnect gathered Engr. Elias Mbam, Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) stated this development at a briefing on the proposed new Revenue Allocation formula Tuesday, August 24, 2021, in Abuja, FCT.

Mbam assured that “the new formula will meet yearning and expectations of three tires of governments.”

The Chairman of RMAFC said: “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.”

While adducing some of the reasons for the proposed new revenue formula, he said that they 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 healthcare etc.”

Mbam also noted: “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.”

The current vertical revenue formula being used by the three tiers of the Nigerian Government was reviewed and passed into law 28 years ago, he stated.

Mbam said that the age of the revenue formula in use has made it imperative for a new revenue formula “for these various reasons”.

It is recalled that the Federal Government recently announced that it was ready to review the vertical revenue allocation formula it currently operates towards the 3 tiers of government in the country.

Alhaji Modu Aji, Commissioner at the RMFAC¸had said this at an interactive session with officials of Yobe State Government, in Damaturu, the state capital, according to agency report.

The RMFAC Commissioner was quoted to have stated that “the current revenue allocation formula stands at 52.68 percent for the Federal Government, that is including special fund for the FCT; Ecological, Stabiliation and Natural Resources Development Funds.

“You then have 26.72 per cent for the states and 20.6 per cent for Local Government Areas.

“This is the vertical arrangement at the moment and it has been the arrangement since 1992.”

According to Alhaji Aji, the model needs to be reviewed citing other unsuccessful attempts due to change of governments, absence of the National Assembly, among others.

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