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 Bayelsa faults FG’s 13% derivation calculation

Bayelsa faults FG’s 13% derivation calculation

The Bayelsa State Government has taken exception to the fiscal arrangement in which states, particularly oil-producing states, do not know how the Federal Government usually arrives at the figures that constitute 13 per cent derivation that accrues to the states.

The Commissioner for Finance, Mr Maxwell Ebibai, stated this at the income and expenditure briefing for the months of August, September and October 2023, in Yenagoa, on Thursday.

He spoke against the backdrop of reports by some non-governmental organisations which rated Bayelsa State as one of the federating states that might not survive without federal allocations because their internally generated revenue could not sustain them.

Ebibai said Bayelsa and other affected states would be more comfortable if they were allowed to be on platforms to also know the actual number of barrels of crude oil exported by the country.

He condemned the analyses of such NGOs, stressing that they did not realise that the Federal Government was only an agent collecting revenue on behalf of the states, and that the states would be much more viable if they were allowed to collect revenues directly.

He contended that the Petroleum Exploration Act was among federal instruments that had deprived states from collecting certain levels land use taxes which they would have deployed substantially for development.

Ebibai, while advocating structured federalism, said, “If you are rating the sustainability of a state based on internal revenue; let’s face the fact. The internal revenue is collected based on the constitution, allowing the collection of those revenues. If that is correct, the same constitution recognizes that we are entitled to 13% (derivation) revenue and the Federal Government is only and agent of collection of 13% revenue on behalf of the states.

“It’s our revenue, it’s not federation revenue. If the capacity was there, and the system allows it, this is revenue that, in fact, if the state (Bayelsa) is allowed to do what we should do, it is in our interest to collect this money directly. This is because now, we are in a situation where it’s the figures they (Federal Government) feed us with that we take as 13% figure.

“If we are allowed to be on some of our platforms to know what is actually going out of our platforms, we will be more comfortable. So, we strongly believe it is wrong to rely on the Constitution as a basis to determine internal revenue, and when it gets to 13% internal revenue, you now decide that the Constitution is not relevant. What kind of analysis is that?

“And based on that, you pass an assessment of viable or no viable state. It’s completely unfair and it’s not acceptable to us.”

The Finance Commissioner, however, disclosed that Bayelsa received net receipts of N20.718bn, N22.356bn and N21.899bn in August, September and October, respectively, from the Federation Account Allocation Committee.(PUNCH NEWS)

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