The Revenue Mobilisation Allocation and Fiscal Commission has begun the analysis of data gathered from the 36 states of the federation and the Federal Capital Territory for the computation of a new national revenue formula.
To ensure that the agency is not deceived by exaggerated claims made by some states to sway the formula in their favour, the data analysis will involve comparing what the states submitted with the data available in federal agencies.
Such federal agencies include the Universal Basic Education Commission, which has data on primary school enrolment; National Population Commission, which has data on population density and other variables; and the National Primary Healthcare Development Agency.
The Head, Public Relations, RMAFC, Mr. Ibrahim Mohammed, who confirmed this development in a telephone interview with our correspondent, also disclosed that the country would get a new revenue formula before the end of the year.
The factors that determine what each state get from the Federation Account include population, the principle of equality, Internally Generated Revenue, landmass and social development factors.
In the current revenue formula, IGR weighs 10 per cent; population, 30 per cent; principle of equality, 40 per cent; landmass, 10 per cent; and social development factors, 10 per cent.
The social development factors are education, which weighs four per cent; health, three per cent; and water, three per cent.
There had been some attempt to get new weights for the determinant factors. The states have been pushing to ensure that the factors where they are better endowed get better weights in the new revenue formula as these determine the horizontal sharing formula.
Towards preparing a new revenue formula, RMAFC had gathered data from the 36 states of the federation and the 774 Local Government Areas as well as the FCT.
It also followed this up in 2012 with a verification tour, which was embarked on by top officials of the agency.
However, the tour could not wholly authenticate the veracity of the data submitted by the states, thus the resolve to compare with relevant federal agencies.
While the states fight together to ensure that they wrestle a higher percentage in the vertical sharing from the Federal Government; they are also fighting among themselves to ensure that the areas where they are better than others get bigger weights in the horizontal sharing.
The revenue sharing formula, which has remained a controversial subject in the Nigerian federation, refers to the proportion of resources accruing to the federation that goes to each of the three tiers of government.
It also defines the proportion of resources that must be retained in the territories where they are generated as well as what goes to the agencies of government that collect the revenues on behalf of the federation.
Currently, 13 per cent of money from mineral resources, known as derivation, goes to the oil producing states. Four per cent of the money collected by the Nigeria Customs Services is given to the organisation as the cost of collection.
Similarly, the Federal Inland Revenue Services receives seven per cent of the money it collects to cater for the cost of collection.
After these deductions, the balance is then pulled together into the Federation Account and shared among the three tiers of government.
At present, the Federal Government gets 52.68 per cent. The state governments get 26.72 per cent, while the local government councils get 20.6 per cent.
The states are pushing to whittle down what goes to the Federal Government, while pushing for a higher stake for the federating units and the LGAs.
From Value Added Tax, four per cent cost of collection is assigned to FIRS.
After this deduction, the net revenue is shared among the three tiers of government in the proportion of the Federal Government, 15 per cent; state governments, 50 per cent, and LGAs, 35 per cent.
On the resolve of RMAFC to give the nation a more equitable revenue formula this year, Mohammed said the agency had overcome the financial challenge that hindered the work from being completed in 2012.
He confirmed that the agency received an allocation of N1.3bn in the 2013 budget to cover its expenses for preparing the new revenue formula.
