ISLAMABAD - After failing in constituting fresh revenue sharing formula, the federal government would transfer the revenue to the provinces under previous National Finance Commission (NFC) award in the budget for the upcoming fiscal year 2016-2017.

The federal government had not called a single meeting to formulate a new resource sharing formula between center and provinces in eleven months of the outgoing year 2015-2016. Maiden and last meeting of the National Finance Commission was held in April 2015. Therefore, the government for the consecutive year would extend the 7th NFC award for the next financial year, as it already extended the 7th NFC award for the current fiscal year 2015-16 after it was expired on June 30 2015.

“President of Pakistan will extend the 7th NFC award for another year, as government could not formulate new award,” said an official of the Ministry of Finance. He further said that National Finance Commission was incomplete since Punjab’s previous member, Dr Aysha Ghaus Pasha was appointed as the provincial finance minister several months back. The federal government in February reconstituted 9th National Finance Commission, he added. The provincial governments would get their shares from the federal government under the 7th NFC award in the upcoming budget 2016-2017 on the following formula: Punjab 51.74 percent, Sindh 24.55 percent, Khyber Pakhtunkhwa 14.62 percent and Balochistan 9.09 percent.

As the government has decided to keep revenue collection target at Rs3.6 trillion in the budget for the next financial year, the federal government would roughly transfer Rs2 trillion (57.5 percent) to the provinces under the NFC award. The Punjab government would receive Rs1071 billion (51.74 percent of the divisible pool), Sindh Rs508.2 billion (24.55 percent), KPK Rs302.6 billion (14.62 percent) and Balochistan would receive Rs188.2 billion (9.09 percent of the divisible pool) during next fiscal year.

The government had estimated to transfer Rs1849.4 billion to the provinces under 7th NFC for the outgoing financial year. According to the official documents of the Ministry of Finance, the Punjab government received Rs415.6 billion during July-December, which is 46.5 percent of its budgeted share of Rs894.7 billion. Meanwhile, Sindh received Rs227.06 billion or 47 percent of its share of Rs482.8 billion. Similarly, Khyber-Pakhtunkhwa (KP) received Rs140.02 billion or 46.6 percent of its annual share of Rs300.4 billion. Balochistan got Rs85.4 billion or 49.8 percent of its annual share of Rs171.49 billion.

Sources informed that federal government transfer entire amount estimated in the budget to the provinces, as Federal Board of Revenue (FBR) would achieve its annual tax collection target of Rs3.1 trillion.

The FBR has collected Rs2345 billion taxes during first ten months (July-April) of the ongoing financial year 2015-2016. The FBR would have to collect Rs759 billion in remaining two months (May and June) of the outgoing financial year to achieve the annual tax collection target of Rs3104 billion. “We are well on track for achieving annual target.