A note on the self-reliant horizontal revenue allocation formula

Abstract

Considering the geopolitical tension in the Niger Delta region of Nigeria, a formula which is based on how self-reliant the individual states are, had been proposed for horizontal revenue allocation. The implementation of the formula was aided by a MATLAB program with arbitrary values assigned to the transition parameters. This paper is a research expanded upon in this direction. A test problem is provided by way of simulation to illustrate the utility of the techniques. The paper contributes to the existing literature by devising a way via a linear model to represent the exponential decay in tax revenue and provides a more appropriate MATLAB program 'hra' to aid institutions saddled with the responsibility of revenue allocation in Nigeria on the implementation of the proposed formula for horizontal revenue allocation.