The Committee asked the FFC to elaborate what it meant by the unconstitutionality of the revenue raising component of the local equitable share formula. The FFC explained that the unconstitutionality of the LES formula refers to the current practice whereby deductions or additions to municipalities' equitable share are based on actual revenue collection figures, which disregards the municipality's capacity to collect revenue and the degree of effort made by the municipality to collect all revenues owed. The FFC advised that this is in contravention of the Constitution. Hence, the FFC recommends that the LES formula should contain a revenue- raising capacity variable.