ISLAMABAD
The poor performance of the Federal Board of Revenue (FBR) has hit hard the provincial governments during last financial year 2013-2014, as their revenue share under National Finance Commission (NFC) Award has been reduced drastically.
The federal government transferred Rs 1.41 trillion to the four provincial governments under NFC Award during previous fiscal year as against the budgeted amount of Rs 1.5 trillion, showing reduction of over 6 per cent. The federal government transferred the tax amount collected by the FBR to the provinces under the NFC Award.
The provincial governments’ shares had been decreased due to the poor performance of the FBR, which failed to achieve its revenue collection target during previous financial year despite revising it several times.
The FBR had fixed its target at Rs2475 billion in last fiscal year, which was revised downward to Rs2345 billion and again to Rs2275 billion.
However, the tax department even failed to achieve its revised target by the end of June 2014 despite taking additional taxation measures. The FBR collected Rs 2266 billion during previous fiscal year 2013-2014 against the twice-revised tax collection target of Rs 2275 billion, leaving shortfall at Rs9 billion.
Therefore, the provincial governments shares had been affected due to the unsatisfactory performance of the tax department, as they received lesser share than the expected one. According to the latest figures released by Ministry of Finance, the federal government had transferred Rs 1406.28 billion to the four provincial governments under National Finance Commission (NFC) Award in last financial year.
The Punjab province had received Rs 646.265 billion from the Center as against the budgeted amount of Rs 708.73 billion. The Sindh province had got Rs 383.69 billion as compared to the estimated budget amount of Rs 400 billion.
The Khyber Pakhtunkhawa province had received Rs 234.4 billion as against the budgeted amount of Rs 251.52 billion.
The Balochistan provinces had got Rs 141.93 billion from the federal government as compared to Rs 141.98 billion during previous financial year 2013-2014.
Under the 7th NFC Award, the federal government is bound to transfer 57.5 percent resources among all the four provinces from FDP.
According to the NFC formula, Punjab’s share stood at 51.74 percent, Sindh 24.55 percent, KPK 14.62 percent, including one percent as share of war against terror and Balochistan 9.09 percent.
The provincial governments had recorded surplus budget of Rs 196 billion as against the federal government’s estimates of just Rs23 billion despite it did not received the budgeted amount from the center, which helped the federal government to restrict budget deficit at 5.5 percent of the GDP (Rs 1388.72 billion) during previous financial year 2013-2014. According to the Ministry of Finance, Punjab posted surplus of Rs98.5 billion, Sindh Rs37.7 billion, Khyber-Pakthunkhwa Rs40.4 billion and Balochistan Rs20.4 billion.