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RMAFC kickstarts review of new revenue allocation formular

Victoria Onu, Abuja

The Revenue Mobilization Allocation and Fiscal Commission has concluded arrangements to fully commence the review of the Nation’s Revenue Allocation Formula.

The review 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.

The Chairman Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Engr. Elias Mbam disclosed these in Abuja while receiving members of the National Assembly service Commission led by Engr. Ahmed Khadi Amshi on a courtesy visit to his office.

The federation account is currently being managed on a legal framework that allows funds to be shared under three major components-statutory allocation, Value Added Tax distribution; and allocation made under the derivation principle.

Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments 20.60 per cent.

The framework also provides that Value Added Tax revenue be shared thus: FG, 15 per cent; states, 50 per cent; and LGs, 35 per cent.

Similarly, extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.

Mbam stated that RMAFC is one of the 14 executive bodies contained in the 1999 constitution as amended and saddled with the statutory function of reviewing from time to time the Revenue Allocation Formula and principles in operation.

This, according to him would help to ensure conformity with changing realities alongside monitoring appropriate revenue accruals to the federation account by the revenue generating agencies.

The RMAFC Chairman while further disclosing that the review of remuneration for political and Judicial office holders will equally take off as soon as the Federal Government release fund for it, further stated that the review of revenue formular is at first concentrating on the vertical formula which has to do with sharing of revenue between Federal, State and Local governments.

This, he stated, would be followed by a horizontal formula which also has to do with sharing among states and among local governments. 

Mbam also added that while the review of remuneration for Judicial and Executive office holders in the federation is subjected to further legislation by National or State Assemblies, RMAFC’S determination for legislatures at Federal, State and Local government is final. 

In his speech, Amshi thanked the RMAFC boss for hosting him and his team while pledging the collaboration of the National Assembly Commission in the area of manpower development considering that, RMAFC has the same organizational structure as the National Assembly.   

Amshi appreciated RMAFC in its mandate of boosting the revenue generation of the nation and its equitable distribution to the three tiers of government.  

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