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FG to get lower revenue with new sharing formula
By Rasaq Adebayo
The 52.68 per cent of the total revenue given to the federal government may be reduced if the new sharing formula proposed by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is approved.
The Commission is presenting the new formula to President Muhammadu Buhari for review December, this year so that the new sharing formula may take effect next year.
The chairman RMAFC, Elias Mbam announced the new date for the submission of the formula yesterday in Abuja.
With the current sharing formula, federal government gets higher share of 52.68 per cent of the total revenue generated in the country while the 36 States share 26.72 per cent, and 774 local governments get 20.60 per cent.
For the Value Added Tax revenue, federal government gets 15 per cent; states: 50 per cent; and local governments: 35 per cent.
The current formula being used by the three tiers of government was done 28 years ago, 1992, when Nigeria had 30 states – before the creation of additional six states.
Giving reasons for the review of the current formula, Mbam said: “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.”
