TUC Seeks Revenue Allocation Formula Review

The Trade Union Congress (TUC) has joined prominent Nigerians in seeking for the review of the nation’s Federalism and what is considered lopsided revenue allocation formula.

The State Chairman TUC, Comrade Chika Onuegbu made the call in Port Harcourt while addressing a press conference to mark this year’s Democracy Day at the union secretariat.

According to the TUC boss, Nigeria operates a federal system of government with the Federal State and Local Governments having their constitutional responsibilities to discharge.

He stressed that the three tiers were given powers to effectively discharge their responsibilities with their shares of the federal allocation.

Comrade Onuegbu said the revenue allocation formula has created a huge imbalance in the allocation of tax powers among the stakeholders, thereby necessitating the need for an arrangement to allocate centrally collected revenue so that revenue and development could spread evenly throughout the country.

The TUC boss said that the more lucrative taxes were being controlled by the federal government to the detriment of the 36 states of the Federation and the 774 local government councils getting 24 percent and 20 percent respectively.

He said that the revenue allocation formula is unfair and unjust in a democratic system of governance where states are forced by their proximity to the people to take care of responsibilities greater than the revenue allocation of the 24 percent.

Comrade Onuegbu said that TUC in Rivers State considered it necessary to call upon the National Assembly to urgently review the lopsided revenue allocation formula in favour of the state governments.

He said “it is my union’s considered opinion that the State governments should formally be given more responsibilities and the Revenue Allocation formula changed to reflect the true reality on ground”.

He said further: “We propose that each State government should get 40 percent of the Federal Allocation, the Federal Government 35 percent and Local Government 17.5 percent and 7.5 percent Special Funds reserved going by the Supreme court pronouncement”.

Comrade Onuegbu said that if Nigeria must develop, revenue must be matched with actual responsibility to encourage the various tiers of government to develop and discharge their responsibilities towards the economy.

On the issue of fiscal federalism the TUC boss called upon the National Assembly to immediately review the fiscal federalism so that the country can practice true federalism.

He stated that true federalism as opposed to the current system which is more of a unitary system of government will encourage the various State governments to develop the economy of their State in their areas of comparative advantages.

Comrade Onuegbu said the “TUC appeals to all well meaning Nigerians to join the union as stakeholders in the democratic governance of this country in the call for the review of current Revenue Allocation formula and our system of fiscal federalism”.

He stressed that Revenue Allocation formula is not a mere instrument used for determining what segment of the polity gets what percentage of the so-called national cake, rather revenue formula should be a tool for ensuring efficiency, social justice and political stability to guarantee growth and sustainable development in the country.

Philip Okparaji