Economic challenges: Senate seeks review of revenue allocation formula by RMAFC

Economic challenges: Senate seeks review of revenue allocation formula by RMAFC

 

Senate has directed the Revenue Mobilisation, Allocation and Fiscal Commission, (RMAFC), to urgently review the present revenue allocation formula that would reflect the present and changing economic realities of the country.

It also asked the Federal Government to table the proposed revenue collection formula before the National Assembly for deliberation and passage into law.

The Senate also 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.

The motion was entitled “The need for Revenue Mobilisation, Allocation and Fiscal Commission to discharge its constitutional functions under paragraph 32 of the Third Schedule of the Constitution.” Presenting the motion, Senator Aliero said the 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 and the revenue allocation formula 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 from the date of the commencement of the Act.

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

According to him, the Senate is 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. He said:

“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.

 

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