Economic Challenges: Senate seeks review of Revenue Allocation Formula by RMAFC

*** Urges RMAFC to forward to it, the proposed revenue collection formula for deliberation and passage

By Henry Umoru

ABUJA- THE Senate has directed the Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC to as a matter of urgency, review the present revenue allocation formula that would reflect the present and changing economic realities of the country.

The Senate has also asked the Federal Government to table the proposed Revenue collection formula before the National Assembly for deliberation and passage into law, just as it urged the RMAFC to discharge its constitutional duties and functions effectively.

The resolutions of the Senate yesterday were sequel to a motion by Senator Adamu Aliero, APC, Kebbi Central and entitled “The need for Revenue Mobilisation, Allocation and Fiscal Commission to discharge its constitutional functions under paragraph 32 of the Third Schedule to the Constitution.”

Presenting the motion, Senator Aliero said that senate noted that pursuant to paragraph 32 of the Third Schedule of the constitution, as amended, RMAFC was established to among other things review, from time to time the revenue allocation formula and principles in operation to ensure conformity with changing realities.

According to him, the constitution provides that any revenue formula which has been accepted by an Act of National Assembly shall remain in force for a period of not less than five years( 5 years) from the date of the commencement of the Act.

Senator Aliero, however, observed that “the present revenue allocation formula has been in operation before the commencement of this democratic dispensation in 1999”.

According to him, the senate was aware that “there is no extant Act of the National Assembly accepting the present revenue allocation formula which means the formula in use now is unconstitutional.

“Now that the constitution does not contemplate that a particular revenue formula is to be in force perpetually, in fact the constitution requires the formula to be reviewed every five years. The current formula is blind to present and changing economic realities and unjustifiably skewed in favour of the federal government.

“Most states of the federation are under the bailout of the federal government which runs into billions of naira, and as a result of this bailout, most of the states are deeply in debt and the fear is that successive state governments are going to inherit huge and insurmountable debts.

“Unless the present formula is reviewed in favour of the states and local governments, real growth and development will continue to elude this great country”.

In his contribution, Senator Matthew Urhoghide, PDP, Edo South said that he though supported the motion, he however cautioned the senate against encouraging states and local governments to relax in their drive for revenue generation to execute projects that would impact on the lives of the people.

According to him, the second and third tiers of government have become lazy in terms of aggressive revenue generation other han the monthly allocation from the Federation Account, and stressed the need for the review of the sharing formula.

Senator Urhoghide said, “The fears we have always had about revenue sharing in this country can be tied to some of the actions we took yesterday (Wednesday on constitution amendment). What we described under devolution of powers, the sharing of revenue from the federation account to a very large extent has been bedevilled because our states and local governments have become very lazy to look for other sources of revenue.

“In as much as I agree that the revenue formula has become obsolete and must be reviewed, the states and local governments too must stand up to the responsibility of the revenue that they collect. The sharing formula must be such that it is able to stimulate the zeal that the states and local governments require to be able to generate their own funds.”

The post Economic Challenges: Senate seeks review of Revenue Allocation Formula by RMAFC appeared first on Vanguard News.