ISLAMABAD - All the four federating units of Pakistan would face the financial cost of Imran Khan’s decision of civil disobedience, as non-payment of taxes by the Khyber Pakhtunkhwa government would reduce the provinces shares from the funds released under the National Finance Commission Award.
The Nation has learnt from officials of Finance Ministry, Federal Board of Revenue and renowned economists that PTI chief Imran Khan’s decision of not paying taxes is much serious than the non-payment of the utility bills. “The government will disconnect the electricity/gas connection if someone does not pay utility bills,” they added.
However, the decision of non-payment of taxes, especially by the Khyber Pakhtunkhwa government, would reduce the revenue receipts of the federal government. Therefore, not only the shares of the provinces under NFC award would reduce, but FBR’s revenue collection target would also be affected. Similarly, they believed that FBR would not be able to meet the annual revenue collection target of Rs 2.8 trillion during the ongoing financial year 2014-2015 due to the non-payment of taxes by one province, KPK.
Cricketer-turned politician on Sunday announced civil disobedience in the country by not paying utility bills and taxes to the government, which is rejected by every section of the society.
“The revenue receipts of the federal government will defiantly reduce if Khyber Pakhtunkhawa government implement the decision announced by its leader Imran Khan of not paying taxes. This will lead to decrease in the provincial government’s share under the NFC,” said a top official of the FBR on the condition of anonymity.
To a question, he said that all the four provincial governments would suffer in terms of revenue collection. The center transferred 57.5 of the revenue collection made by FBR to the provinces under NFC every year and if one of the provinces did not collect taxes then shares of all four provinces would reduce, he added.
Meanwhile, talking to The Nation, eminent economist Dr Ashfaque Hassan said that FBR’s annual revenue collection target of Rs 2.8 trillion set for the ongoing fiscal year would unlikely to be met if KPK government would implement Imran Khan’s decision. “All the taxes collected by provinces go into divisible pool from where these are distributed as per the NFC formula.
Therefore share of the other provinces will also reduce if KPK does not collect taxes,” he explained.
Adopting almost the same stance, another renowned economist Qaiser Bangali, who was part of the NFC commission formation, said all the four provinces would not get their budgeted shares if KPK did not pay taxes. However, he was optimistic that Imran’s call for civil disobedience would not be successful, as it did not have machinery to enforce its decision. “Major taxes are collected from Karachi, around 70 percent, wherein PTI does not have representation,” he added.
The federal government would transfer Rs 1.72 trillion to the four provinces under the National Finance Commission (NFC) award in the ongoing financial year 2014-15.
The federal government would transfer Rs 812.786 billion to Punjab in current financial year 2014-15. Similarly, the Sindh province would get Rs 464.007 billion in the current financial year 2014-15. Meanwhile, the federal government would transfer Rs 283.68 billion to Khyber Pakhtunkhwa in the ongoing fiscal year. The Balochistan province would get Rs159.71 billion in the present financial year under NFC award.
However, all the estimated figures depend on the overall revenue collection to be made by Federal Board of Revenue during the ongoing fiscal year.