The Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Elias Mbam, on Wednesday September 15, 2021, lambasted the 36 state governments and the 774 local government areas in the country for not thinking of new ways to generate revenue for the Federation.
He spoke as a guest on a Television programme monitored by newsmen.
According to Mbam, governors and local government chairmen should stop agitating for new revenue allocation formula but focus on how to increase the “cake”.
Of recent, state governors and local government chairmen have clamoured for a review of the current revenue allocation formula which they claimed was against fiscal federalism as it allocated more to the central than to the subnationals.
Currently, the Federal Government gets a total of 52.68%, states get 26.72% while LGs get 20.60% of the country’s monthly revenue allocated by the RMAFC which operates under the Presidency, and disbursed by the Federation Account Allocation Committee.
Speaking on the television programme on Wednesday September 15, the RMAFC boss said landmass, population size and the duties of each of the three tiers of government are important factors to be considered in determining a new revenue allocation formula for the country.
Mbam said the last review was done in 1992 and a new review of the sharing formula has not been possible till date because of lack of political will and over-politicisation of the matter.
He, however, expressed optimism that a new revenue allocation formula would be submitted to the President, Major General Muhammadu Buhari (retd.), on or before December 31, 2021.
The RMAFC boss also said the Commission won’t wait for the outcome of the ongoing process for constitutional review and amendment in the National Assembly before going on to submit its recommendations to the President before the end of 2021 because, according to him, nobody knows when the lawmakers would be through with the process.
He said, “We are concerned more in increasing the size of the cake than dissipating our energy in sharing of the cake and the Commission has swung into action on this, it has carried out sensitisation in all the zones, in telling states and local governments to diversify, telling them what they can do, what is available in their areas to diversify because the ultimate way you can increase the revenue is to diversify from oil and gas and we have quite a lot of them (economic areas).
“There is no state or zone that doesn’t have one form of solid mineral or the other, why can’t we develop our solid mineral sector? Why has agriculture gone back?
The RMAFC chairman also said no one should preempt or predetermine the new revenue allocation formula that would be submitted to the President on or before December 31, 2021.
Mbam made the comments at a time when some states including Rivers, Lagos, Ogun, Adamawa, amongst others are clamouring for the collection of Value Added Tax generated within their domains.