Revenue Sharing Formula: Governors propose 42 percent for States

There may be a drastic reduction in the Federal Government’s share from Federation Account  as states goverment set up committee to negotiate for a 42 percent share.

The committee which is headed by Lagos State Governor, Babatunde Fashola proposed  35 percent for Federal Government, states (42 per cent) and local governments (23 per cent).

The current revenue formula gives the Federal Government 52 per cent, states 26.72 per cent and local governments 20.60 per cent.

The governors approved the proposal at a meeting of the Nigerian Governors Forum (NGF) in Abuja on Wednesday night.

The communique of the meeting, signed by NGF chair Governor Rotimi Ameachi of Rivers State, reads: “The Forum deliberated extensively on the continuing unconstitutional deductions by the Federal Government from the Federation Account in the name of oil subsidy which negates the principles of federalism and budgetary provisions. It noted that despite the increase in pump price of petrol, the quantum of subsidy deduction is still worrisome. The Forum, accordingly constituted a Committee to meet with Mr. President.

“Following briefing by the National Security Adviser, the Forum reiterated the need for closer cooperation between the States and Federal Government in addressing security challenges, noting also the necessity for increased empowerment of the State Governors to perform their role as Chief Security Officers in their respective States;

“The Forum considered the current revenue allocation formula of the country and reiterated its commitment to its earlier report that proposed, among others, the following revenue allocation formula: Federal 35%, State 42%, & Local Government 23%;

“Noting the urgency of the need to completely eradicate polio from Nigeria, which remains among the last three polio endemic countries in the world along with Afghanistan and Pakistan, the Forum renewed its commitment to a holistic approach to polio eradication. It specifically agreed that for maximum effect, Deputy Governors should take charge of State Task Force on polio eradication;

“After listening to a comprehensive presentation on Tax Matters, with particular focus on the unique Tax Identification Number, the Personal Income Tax (Amendment) Act, 2011 and other actions designed to increase revenue at the State level by Mrs Ifueko Omoigui Okauru, the Executive Chairman of Federal Inland Revenue Service (FIRS) and Joint Tax Board (JTB), the Forum thanked her and commended Mrs. Okauru’s exemplary and distinguished service to the nation, wishing her the best in her future endeavours.”

Already, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has written to the governors and other stakeholders of its intention to review the revenue formula.