K-P rejects Rs6.4b federal deduction

Afridi says no constitutional, legal basis exists for deduction from July's transfers without consent

PESHAWAR:

Khyber-Pakhtunkhwa Chief Minister Muhammad Sohail Afridi has rejected the federal government's directive to deduct Rs6.4 billion from the province's July federal financial transfers, saying the move was issued without the provincial government's consent and had no constitutional or legal basis.

The chief minister said the K-P government would not accept what he termed an unconstitutional measure and would defend the province's constitutional and financial rights at every legal, constitutional and institutional forum.

He said the federal government had sought additional funds from K-P, as well as other provinces, before the budget for the current fiscal year. Based on the Federal Board of Revenue's target of Rs15,260 billion in tax collection, K-P's share in the additional amount would have been around Rs175 billion.

Afridi said he had made the provision of the additional funds conditional on a meeting with PTI founder Imran Khan and his approval. Another condition was that the merged districts be given their legitimate constitutional share under the 11th National Finance Commission.

According to the chief minister, the federal government agreed to provide the merged districts their due financial share within six months, and the commitment was incorporated into the proceedings of the National Economic Council. It was also agreed that if the share was not provided within six months, a summary would be sent to the prime minister and president under the 7th NFC, paving the way for an ordinance through the constitutional procedure.

Afridi said that since he was not allowed to meet Imran Khan, the K-P government neither approved nor signed any memorandum of understanding concerning the provision of additional funds.

He said the additional amount was therefore not included under federal grants in the K-P budget for fiscal year 2026-27, nor was any allocation made for the proposed arrangement.

Despite this, the federal Ministry of Finance issued a directive on August 5 for an at-source deduction of Rs6.4 billion from K-P's July federal transfers. Afridi noted that the directive was issued on the day the provincial government was holding a public gathering in Peshawar against what he described as Imran Khan's unjust three-year imprisonment.

The K-P Finance Department, he said, formally conveyed the provincial government's opposition to the proposed deduction in a letter sent to the Accountant General K-P on August 13.