The Senate has asked the Revenue Mobilisation Allocation and Fiscal Commission to review the current revenue sharing formula.
According to the legislature, the current formula does not reflect the economic realities in the country.
The lawmakers lamented that the formula in use was designed to favour the Federal Government, while the states and the local governments were struggling to survive economically.
The demand by the Senate followed the adoption of a motion moved by Senator Adamu Aliero at the plenary on Thursday.
It was titled: ‘The Need for (the) Revenue Mobilisation Allocation and Fiscal Commission to Discharge its Constitutional Function under Paragraph 32 of the Third Schedule to the 1999 Constitution’.
Aliero noted that the RMAFC was established to review the revenue allocation formula and principles in operation from time to time to ensure conformity with changing realities.
He added that this must be done “provided that any revenue formula, which has been accepted by an Act of the National Assembly, shall remain in force for a period of not less than five years from the date of the commencement of the Act.”
Aliero said, “The Senate observes that the present revenue allocation formula has been in operation before the commencement of this democratic dispensation in 1999; it 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.
“The Senate notes that the Constitution does not contemplate that a particular revenue formula is to be in force in perpetuity. In fact, the Constitution requires the formula to be reviewed every five years.”
He added, “The Senate notes also that the current formula is blind to present and changing economic realities, and unjustifiably skewed in favour of the Federal Government.”
“The Senate is aware that most of the 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.”
The lawmaker pointed out that unless the current formula was reviewed in favour of the states and local governments, real growth and development would continue to elude Nigeria.
The Senate unanimously granted the prayers of the motion to “urge the Revenue Mobilisation Allocation and Fiscal Commission to discharge its constitutional duties and functions; and direct the RMAFC to review the present revenue allocation formula to reflect the present and changing economic realities of our country.”
The lawmakers also urged the Federal Government to table the proposed revenue collection formula before the National Assembly for deliberation and passage into law.
Seconding the motion, Senator Mathew Urhoghide, however, cautioned the Senate against encouraging states and local governments to relax in their drive to generate revenue to execute projects.
