Jacked up: Provinces to get Rs1.9 trillion
Their share in federal taxes and straight transfers has been hiked by 17.4 per cent.
PHOTO: FILE
ISLAMABAD:
The federal government has allocated Rs1.938 trillion on account of net transfers to the provinces in the next fiscal year – a major portion of which comes from the divisible pool of taxes.
According to the budget document presented in parliament on Friday, the provincial share in federal taxes and straight transfers was jacked up by 17.4% for the fiscal year beginning July 1.
In the previous year’s budget, the federal government had initially set aside Rs1.852 trillion for the provinces, but a net amount of Rs1.636 trillion was actually transferred, as per the revised estimates.
Allocations to the provinces for the next year have been made under the 7th National Finance Commission Award, which will expire at the end of this month. Under the NFC Award, provinces enjoy a share of 57.56% in the federal divisible pool.
A large portion of next year’s transfers will be drawn from the divisible pool of taxes which is estimated at Rs1.746 trillion. The other major component of Rs102 billion going to the provinces has been allocated under the head of straight transfers. These two components alone total Rs1.85 trillion.
The divisible pool of taxes comprises income tax, capital value tax, sales tax, federal excise and customs duties. Straight transfers include royalties on crude oil and natural gas, and development surcharge and excise duty on natural gas.
Of the total Rs1.85 trillion allocated for the provinces in federal taxes, Punjab will get the lion’s share of Rs894.7 billion followed by Sindh, which will receive Rs482.8 billion. The Khyber-Pakhtunkhwa government will get Rs300.45 billion while Balochistan’s share has been decided at Rs171.48 billion.
In addition to these heads, the provinces will also get Rs776 million on account of general sales tax on services, Rs38 billion in special grants, Rs85.5 billion in project loans and grants, Rs19.17 billion as programme loans and a Rs52 million grant from the Japanese government.
Published in The Express Tribune, June 6th, 2015.
The federal government has allocated Rs1.938 trillion on account of net transfers to the provinces in the next fiscal year – a major portion of which comes from the divisible pool of taxes.
According to the budget document presented in parliament on Friday, the provincial share in federal taxes and straight transfers was jacked up by 17.4% for the fiscal year beginning July 1.
In the previous year’s budget, the federal government had initially set aside Rs1.852 trillion for the provinces, but a net amount of Rs1.636 trillion was actually transferred, as per the revised estimates.
Allocations to the provinces for the next year have been made under the 7th National Finance Commission Award, which will expire at the end of this month. Under the NFC Award, provinces enjoy a share of 57.56% in the federal divisible pool.
A large portion of next year’s transfers will be drawn from the divisible pool of taxes which is estimated at Rs1.746 trillion. The other major component of Rs102 billion going to the provinces has been allocated under the head of straight transfers. These two components alone total Rs1.85 trillion.
The divisible pool of taxes comprises income tax, capital value tax, sales tax, federal excise and customs duties. Straight transfers include royalties on crude oil and natural gas, and development surcharge and excise duty on natural gas.
Of the total Rs1.85 trillion allocated for the provinces in federal taxes, Punjab will get the lion’s share of Rs894.7 billion followed by Sindh, which will receive Rs482.8 billion. The Khyber-Pakhtunkhwa government will get Rs300.45 billion while Balochistan’s share has been decided at Rs171.48 billion.
In addition to these heads, the provinces will also get Rs776 million on account of general sales tax on services, Rs38 billion in special grants, Rs85.5 billion in project loans and grants, Rs19.17 billion as programme loans and a Rs52 million grant from the Japanese government.
Published in The Express Tribune, June 6th, 2015.