The Federation Accounts Allocation Committee may have finally caved in to the demands of the states following the commencement of discussions on the review of the current revenue allocation formula among the three tiers of government.
The Chairman, FAAC Commissioners of Finance Forum, Mahmoud Yunusa said the states have started to push for a review of the formular to reflect current economic realities.
States had during the tenure of former President Olusegun Obasanjo led the agitation for the review of the formula which was first enacted in 1982 by the Revenue Mobilisation Allocation and Fiscal Commission formula but became operational in 1999, with amendment.
Under the current revenue allocation formula, the Federal Government gets 52.68 per cent of statutory allocation, states 26.72 per cent, local government councils 20.6 per cent while 13 per cent is allocated to the oil producing states based on derivation principle.
The Federal Government gets 15 per cent, states 50 per cent while local government council get 35 per cent for Value Added Tax revenue.
At the meeting which had in attended Wednesday by Permanent Secretary, Ministry of Finance, Mahmoud Dutse, the Accountant-General of the Federation Alh Ahmed Idris and other top officials, the Chairman who is also the commissioner of finance representing Adamawa state at FAAC said, “The revenue sharing formula is where discussion has commenced within us to see how we can be able to have a realistic and justifiable review of revenue sharing formula.
“The real Nigerians are the ones that reside in states and local govt level and we want the state and local govt to have more revenues so that they will work for people, so that people will feel the impact and the presence of government.
“We will push for the revenue sharing formula to be reviewed and I think at the appropriate time we will make the announcement.”
Dutse who also spoke at the event explained that the federation account recorded increase in revenue collection during the month of April.
He said that all revenue lines from revenue generating agencies such as the Nigerian National Petroleum Corporation, the Federal Inland Revenue Service and the Nigerian Customs Service recorded increase.
He put the gross revenue generated in the month of April at N613.05bn, adding that this was N132.45bn higher than the N480.59bn received during the month of March.
He said as a result of the increase in generated revenue during the period, the committee agreed to transfer the sum of N24.5bn into the Excess Crude Account.
The fresh transfer into the ECA, according to him, brings the total balance in the account to $1.91bn.
On the amount allocated to the three tiers of government, he said the committee shared N701bn to the three tiers of government.
This is made up of statutory allocation of N613.05bn while the balance of N87.96bn was distributed under VAT.
From the N613.05bn shared under statutory allocation, Dutse said the Federal Government got N276.53bn, states N140.26bn, local government councils N108.13bn.
He said the sum of N49.75bn was allocated to the oil producing states based on 13 per cent derivation principle while revenue generating agencies were given N38.36bn as cost of revenue collection.
For VAT of N87.96bn, he said the Federal Government got N12.5bn, states N41.7bn and local government councils N29.19bn.
When asked whether the revenue under payment which led to disagreement between the committee and the NNPC had been resolved, he said discussion is ongoing and will be disclosed in due course.
He said, “There were some disagreement in the recent past but discussion is ongoing between NNPC and all the interested parties to resolve all matters including reconciliation of different figures from different entities. This matter will be resolved in due course.”
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