K-P opposes NFC rollback

CM's aide rejects parliament's role on tax share issue

ISLAMABAD:

Khyber-Pakhtunkhwa on Wednesday opposed any move to reduce provincial shares in federal taxes through an amendment in the Constitution, urging instead that such matters be resolved through a new National Finance Commission (NFC) award.

Addressing a news conference, Chief Minister's Adviser on Finance Muzammil Aslam said that any change in the revenue distribution between the Centre and the provinces must be decided through consensus within the NFC.

"Parliament is not the forum for this issue - it requires agreement among all five stakeholders: the four provinces and the federation," he asserted.

He called on the federal government to immediately issue a notification for the first NFC meeting, tentatively scheduled for November 18, noting that no formal notice had yet been released.

The renewed debate over the NFC arose this week after Pakistan Peoples Party chairperson Bilawal Bhutto-Zardari revealed the government's agenda of the 27th (constitution) amendment through a social media post.

The NFC is chaired by the federal finance minister and the four provincial finance ministers are its members where the decision is taken with consensus as per the constitution. However, a constitutional amendment requires a two-thirds majority.

Muzammil also opposed handing back the subjects of education and population planning to the federal government, saying when the federal government cannot manage its own expenses how can it take care of new departments.

Muzammil criticized the federal government for its failure to contain expenses and eying on the shares of the provinces. Similar sentiments were also expressed by a senior leader of Pakistan Peoples Party.

The federal government wants to cut the throats of the provinces by rolling back the NFC because the federal government cannot manage its fiscal space, said Syed Naveed Qamar of the PPP while speaking at a seminar.

Finance Minister Muhammad Aurangzeb also this week refused to comment on the government's proposal to take responsibility of the two provincial subjects and ending the minimum guaranteed share of the provinces.

"This discussion belongs to the NFC, where it will take place," said Aurangzeb, declining to comment on proposals to roll back the devolution of education and population welfare or to end the constitutionally guaranteed 57.5% provincial share in the federal divisible pool.

But Muzammil Aslam questioned whether the federal government would also take the responsibility of 315,000 employees of the provincial education department who are equal to 45% of the total employees of K-P government.

He said the K-P government spends 22% of its budget on education and the federal government cannot do the same, which will compromise the quality of education in the province.

The K-P finance adviser proposed revising the criteria for determining provincial shares in the NFC, shifting the focus from a predominantly population-based formula to factors such as forest coverage, water reservoir development, and reduction in out-of-school children.