Budget allocation: Senators seek guarantees for provincial share
Say allocations should not be made solely on the basis of tax collection targets.
Say allocations should not be made solely on the basis of tax collection targets. DESIGN-FAIZAN DAWOOD/FILE
ISLAMABAD:
In what may be a prelude to negotiations on the new National Finance Commission (NFC) award, the joint opposition in the Senate has proposed that amounts allocated to the provinces in the federal budget should be guaranteed whether the centre achieves its tax collection target or not.
The proposal came after shares of three provinces in federal taxes were reduced by Rs90 billion during the outgoing fiscal year due to the Federal Board of Revenue’s (FBR) inability to achieve this year’s tax target of Rs2.475 trillion.
On the basis of the original target, the federal government had indicated Rs1.502 trillion shares of the provinces in the federal taxes. As the target has been revised downwards to Rs2.275 trillion without the consent of parliament, the share of the provinces has been reworked at Rs1.413 trillion.
Under the 7th five-year NFC award that will expire in the next financial year 2014-15, the share of the provinces has been determined at 57.5% of the total federal tax collection.
However, Balochistan’s share has been guaranteed on the basis of the projected FBR revenue –a model that the opposition in the upper house of parliament wants extended to other three provinces as well.
The negotiations for the 8th NFC Award will begin from the next fiscal year and has to be concluded within a year.
The Senate Standing Committee on Finance and Revenue will consider the joint opposition’s proposals and send its recommendation to the National Assembly.
The demand highlights the increasing expectations that the provincial governments have from the new NFC award.
Though the provinces’ share is determined at 57.5% of the total taxes, they are getting 67% of the total revenues after including straight transfers, guaranteed revenue to Balochistan and other obligatory payments, said Finance Minister Ishaq Dar.
Published in The Express Tribune, June 10th, 2014.
In what may be a prelude to negotiations on the new National Finance Commission (NFC) award, the joint opposition in the Senate has proposed that amounts allocated to the provinces in the federal budget should be guaranteed whether the centre achieves its tax collection target or not.
The proposal came after shares of three provinces in federal taxes were reduced by Rs90 billion during the outgoing fiscal year due to the Federal Board of Revenue’s (FBR) inability to achieve this year’s tax target of Rs2.475 trillion.
On the basis of the original target, the federal government had indicated Rs1.502 trillion shares of the provinces in the federal taxes. As the target has been revised downwards to Rs2.275 trillion without the consent of parliament, the share of the provinces has been reworked at Rs1.413 trillion.
Under the 7th five-year NFC award that will expire in the next financial year 2014-15, the share of the provinces has been determined at 57.5% of the total federal tax collection.
However, Balochistan’s share has been guaranteed on the basis of the projected FBR revenue –a model that the opposition in the upper house of parliament wants extended to other three provinces as well.
The negotiations for the 8th NFC Award will begin from the next fiscal year and has to be concluded within a year.
The Senate Standing Committee on Finance and Revenue will consider the joint opposition’s proposals and send its recommendation to the National Assembly.
The demand highlights the increasing expectations that the provincial governments have from the new NFC award.
Though the provinces’ share is determined at 57.5% of the total taxes, they are getting 67% of the total revenues after including straight transfers, guaranteed revenue to Balochistan and other obligatory payments, said Finance Minister Ishaq Dar.
Published in The Express Tribune, June 10th, 2014.