ISLAMABAD-The federal government had transferred Rs509 billion lesser than projected amount to the four provinces from the divisible pool in nine months (July to March) of the current fiscal year due to failure of Federal Board of Revenue (FBR) in meeting its tax collection target.

The federal government had transferred Rs1.931 trillion to the four provinces under National Finance Commission (NFC) award in nine months. The center was supposed to transfer Rs2440.95 billion (75 percent of the annual projected amount) in period under review. However, the FBR’s failure in meeting its tax collection target had deprived provinces from Rs509 billion.

The International Monetary Fund (IMF) had estimated that the government would miss the tax collection target of Rs5.55 trillion by Rs1.647 trillion during ongoing financial year. The Federal Board of Revenue (FBR) tax collection would record at Rs3.908 trillion after COVID-19 against the initial target of Rs5.55 trillion. The FBR would also miss the revised target of Rs4.8 trillion by Rs892 billion.

The reduction in FBR’s tax collection would also slash the provincial governments share from the divisible pool, which would affect their annual budgets. In the annual budget 2019-20, the federal government had projected to transfer Rs3254.6 billion to the four provincial governments under the NFC Award during the present fiscal year as against Rs2462.7 billion handed to them last year.

The provincial governments get shares from the federal government under the 7th National Finance Commission (NFC) Award as per this formula: Punjab gets 51.74 percent, Sindh 24.55 percent, Khyber Pakhtunkhwa (KP) 14.62 percent and Balochistan 9.09 percent.

According to the data released by the Ministry of Finance, the federal government has transferred Rs1.931 trillion to the four provinces during nine months of the current fiscal year.

The federal government had transferred Rs922.3 billion to Punjab in July to March period of the FY20. The amount is 57.23 percent of the province’s annual share in the Award. The federal government has projected to transfer Rs1611.4 billion to Punjab in the ongoing fiscal year.

Meanwhile, Sindh has received only 58.41 percent of its share from the federal government as against the projected 75 percent share. The federal government had transferred Rs476.02 billion to Sindh during July-March period of the ongoing financial year. In all, Sindh will receive Rs814.9 billion from the Centre in the entire FY.

According to the documents, KP has received Rs312.97 billion from the federal government, which is 58.69 percent of its annual share. The province will receive Rs533.3 billion as against Rs404 billion in the last year. However, Balochistan has received more than its projected share.

The province has received Rs220.4 billion from the federal government under the NFC Award in the first nine months of the current fiscal year, which is 74.71 percent of its annual share of Rs295 billion.