How is oil revenue shared in Nigeria?
How is oil revenue shared in Nigeria?
Revenue allocation Oil and gas producing regions receive 13% of the government revenue from production in their territory. These revenues are distributed according to an allocation formula (52,68% to central government, 26,72% to regional governments, and 20,60% to local governments).
How does the federal government share revenue?
About 50 percent of federal revenue comes from individual income taxes, 7 percent from corporate income taxes, and another 36 percent from payroll taxes that fund social insurance programs (figure 1). The rest comes from a mix of sources.
What is the meaning of revenue sharing?
Revenue sharing is a somewhat flexible concept that involves sharing operating profits or losses among associated financial actors. Revenue sharing can exist as a profit-sharing system that ensures each entity is compensated for its efforts.
How did revenue sharing work?
Revenue sharing, a government unit’s apportioning of part of its tax income to other units of government. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states.
What percentage of Nigeria revenue is oil?
The Nigerian economy is heavily dependent on the oil sector, which, accounts for over 95 percent of export earnings and about 40 percent of government revenues, according to the International Monetary Fund.
Who is in charge of revenue allocation in Nigeria?
The committee in charge of allocating funds from the Federation Account to the three tiers of government. The Revenue Mobilization Allocation and Fiscal Commission is a corporate body that occupies a very strategic position in the fiscal administration of the Nigerian government.
How is the VAF formula applied in Nigeria?
This formula is applied vertically to the total volume of disburseable revenue in the Federation Account at a particular point in time. The VAF allows every tier of government to know what is due to it; the Federal Government on one hand and the 36 States and the FCT and 774 Local Governments on the other.
What is the vertical and horizontal allocation formula in Nigeria?
Thus, it can conveniently be concluded that the vertical allocation formula is for inter-tier sharing between the three tiers of government while the horizontal allocation formula is for intra tier sharing among the 36 States and the 774 Local Governments in Nigeria
How is the allocation of water made in Nigeria?
50% of the allocation to water shall be made in direct proportion to the state territorial spread while the remaining 50% shall be made in inverse proportion to the mean annual rain fall in each state headquarters, using the most current 5-year figures. This is the same for all the states.
How is oil revenue shared in Nigeria? Revenue allocation Oil and gas producing regions receive 13% of the government revenue from production in their territory. These revenues are distributed according to an allocation formula (52,68% to central government, 26,72% to regional governments, and 20,60% to local governments). How does the federal government share revenue? About…