Reps probe multi-trillion naira revenue allocation, 13% diversion account since 2012

The House of Representatives on Tuesday unveiled plans to investigate the accuracy of data provided to the Revenue Mobilization Allowance and Taxation Commission (RMAFC) by the federation's 36 states and 774 local government areas that were used to calculate the indices used for vertical and horizontal distribution of income, including 13% diversion from 2012 to 2021 and the current nature of maintenance of this data.

The resolution was passed following the passage of a motion titled: "Call to investigate the statutory functions of the RMAFC in the areas of revenue allocation, data collection and verification, the provision of clues for disbursement to the States by the Accountant General of the Federation and alleged offense in the administration of the Federal Ministry of Finance”, sponsored by the Hon. Marc Gbillah.

To this end, the House has mandated its Finance Committee, chaired by Hon. James Faleke to investigate the indices calculated for each of the 36 states and 774 local government areas of the federation by RMAFC from 2021 to 2021 which were forwarded to the Accountant General of the Federation for the disbursement of revenues to the states from 2012 to 2021, including the parameters used to calculate the indices.

The Committee should also investigate the indicia used by the Federation's Accountant General for revenue disbursements to the federation's 36 states and 774 local government areas from 2012 to 2021, including details of the actual amounts disbursed to each state for this period.

In the same vein, the Committee is to determine the actual amounts disbursed to the 36 states and 774 local government areas of the federation from 2012 to 2021 by the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, as well as the allocation principles used by RMAFC in proposing a new vertical allocation formula and reviewing the effectiveness and appropriateness of this based on current and changing realities and the proposed principles for a new horizontal allocation formula.

The House also instructed the Committee to investigate the total remittance to the federation account by related federal government agencies from 2012 to 2021, the "cost of collection" deducted for the entire period, support statutory for this and use from 2012 to 2021.

The Committee shall also verify violation or otherwise by the Federal Ministry of Finance, CBN and other members of the FAAC in the administration of the Federation account taking into account the provisions of Article 162 (3 , 4.5 and 7) of the 1999 Constitution (as amended) and report within 8 weeks for further legislative action.

In his main debate, Hon. Gbillah observed that "Paragraph 32 of Part 1 of the Third Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and Section 6 of the Revenue Mobilization Allocation and Tax Commission, 2004 outlines the powers of the commission which, among others, include “reviewing, from time to time, prevailing revenue allocation formulas and principles to ensure the accordance with changing realities", paragraph 32 (b) of part 1 of the third schedule of the 1999 constitution (as amended) further states that "provided that any revenue formula which has been accepted by a law of the National Assembly remains in force for at least five years from the date of entry into force of the law".

"The Chamber is aware that, in carrying out its statutory mandate, the Tax and Revenue Mobilization Allocation Commission is responsible for providing a horizontal and vertical revenue allocation formula, collection, verification, maintenance and use of data used for the calculation of the federation account income disbursement indices against the horizontal and vertical income distribution formula and the income disbursement indices diversion fund of 13% by the accountant general of the federation.This data should be obtained from the 36 states and 774 local government areas of the federation by RMAFC.

"The House is concerned about Nigeria's current use of the same vertical and horizontal revenue allocation formula and allocation principles instituted under military rule three decades ago in 1992, when 6 states and 185 local government areas were created and Nigeria's population grew from 88 million to over 200 million, and the current national clamor for restructuring, decentralization of powers and true federalism amid changing realities evidence of insecurity and socio-economic hardship across the country contrary to the statutory provisions mentioned above, including Section 162(2) of the 1999 Constitution (as amended).

"The House is also concerned that RMAFC's new proposal to the President in April 2022 for a revenue allocation formula is for vertical revenue allocation only and would have used those over thirty (30) years of age al...