RMAFC and last lap of new revenue sharing formula
Written by on April 18, 2022
The leadership of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), inaugurated on June 27, 2020 by President Muhammadu Buhari, on Thursday April 8, submitted the proposed new revenue sharing formula.
This was after a painstaking effort by the commission to gather and synthesise inputs from stakeholders most of which moved for the shedding of weight by the federal government and more allocations to the states and local governments.
The president when he inaugurated the board stressed that it should not compromise the constitutional mandate of the commission for any reason.
The RMAFC was created by law to monitor the accumulation and disbursement of income from the federation account.
The commission is also to advise federal, states and local governments on tax efficiency and the methods by which their revenues should be increased, among others.
The current revenue sharing formula is as follows: federal government 52.68 per cent, states 26.72 per cent, local governments 20.60 per cent, and 13 per cent going to oil producing states. It came into force in 1992.
The proposal by the commission is for the federal government to have 45.17 per cent, state governments, 29.79 per cent and 21.04 per cent for the local governments.
After Buhari received the report from Chief Elias Mbam, the Chairman of RMAFC, he said he would await the final outcome of the constitutional review process before presenting the report of the review of the vertical revenue allocation formula to the National Assembly as a bill for enactment.
Buhari assured that the report will be subjected to internal review and approval processes, while awaiting finalisation of the efforts by the National Assembly.
The final verdict on new revenue sharing formula is now in the court of the legislature. The national legislators are also expected to be fair to all tiers of government.