The federal government says it
will set up a committee to review the revenue sharing formula for federal,
states and local governments due to current economic realities.
Elias Mbam, chairman of the
Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), made this known
after he received an award of excellence from the Nigeria Civil Service Union.
According to the current revenue
allocation formula, the federal government gets 52.68%, states get 26.72% and
local governments, 20.60%.
Also, 13% of oil and gas
federally collected revenue is returned to the oil-producing states as
derivation revenue to compensate for ecological disasters arising from oil
production.
“My agenda is to expand the
sources of revenue for the federation. I will like to expand the cake that we
are sharing so that people will get a reasonable quantity,” he said.
“I intend to do this through
diversification in areas outside oil and gas, and that includes solid minerals,
agriculture and manufacturing.
“So, we will encourage states and
let them know what is available outside oil and gas so they can develop those
aspects of the economy to their own benefit.”
The formula was designed during
former President Olusegun Obasanjo’s administration.
In 2013, the RMAFC saw the need
to review the formula for balanced development of the country, hence it
embarked on a nationwide consultation and met with notable figures on the
issue.
In December 2014, the commission
came out with a proposed new revenue formula but for some reasons, it has not
been implemented.
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