The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) said state governments are right to demand a review of the revenue sharing formula of the Federation Account.
Outgone Acting Chairman of the commission, Shettima Abba-Gana, said this while speaking with the News Agency of Nigeria (NAN) in Abuja.
He, however, said that reviewing the formula was not the solution to states and Local Government Areas’ (LGAs) quest for increasing their revenue.
Under the current sharing formula, the federal government takes the lion share of 52.68 per cent from the Federation Account.
The 36 states are allocated 26.72 per cent, while the balance of 20.60 per cent is given to the 774 LGAs.
“Reviewing the formula is not an easy process and I am not particularly sure whether the review of the revenue sharing formula is the best solution for states.
“This is because the formula itself is based on a foundation and that is the constitution that has given the federal exclusive functions and states and LGAs concurrent functions.
“Unless you move functions from one tier to another, it will be very difficult to just transfer funds boldly to another tier.”
According to him, the magnitude of what the states are requiring may not be necessarily easy without some constitutional amendments to look at what the concurrent and exclusive functions of the states, LGs and Federal Governments are.
Mr Abba-Gana, however, said that what the RMAFC always advocated was getting more revenue that would be enough for the three tiers to share.
He added that even the federal government itself required more funds, especially with the current security situation in some parts of the country and the demand for infrastructure which also required funding.
“So what the RMAFC has always advocated for is to get more revenue, we have always been pushing that the Product Sharing Contracts (PSCs) be reviewed to increase the government’s take.