The House of Representatives has advised President Muhammadu Buhari, to as a matter of urgency, submit a proposal on a new Revenue Allocation Formula to the National Assembly.
The lawmakers said the formula presently in use for allocating funds from the Federation Account to the federal, state and local governments, is outdated.
As contained in the present formula, 52.68 is allocated to the Federal Government in the Federation Account, 26.70 is for states and 20.60 for local government areas.
The Reps’ resolution followed the adoption of a motion by Rotimi Agunsoye (APC, Lagos), who noted that the formula being used by the Revenue Mobilisation Allocation and Fiscal Commission (RMFAC) was enacted in 1982 and amended in 1992 before the 1999 Constitution came into force.
He said: “It is worrisome that the effectiveness of the current applicable formula, which is over 30-year-old, would appear doubtful to reflect the realities facing the financial needs of the three tiers of government.
“It is observed that the provision in the 1992 Act, which prescribes for the deduction of various percentages totalling about 7.5 per cent, which is referred to as ‘Special Fund’, has been adjudged unconstitutional by the Supreme Court.
“Section 162 (2) of the constitution requires the President, on recommendation of RMFAC, to submit a proposal for a new Revenue Allocation Formula, in line with contemporary realities, poses frequent financial threats and hardships in the fiscal relationship between the three tiers of government, creating imbalance and loopholes of uncertainty in the federal structure.”
When the motion was put to a voice vote by the Speaker, Hon. Yakubu Dogara, it was unanimously adopted.