ISLAMABAD - The federal government has transferred Rs312.2 billion to Sindh under National Finance Commission (NFC) award during eight months (July to February) of the ongoing fiscal year.
The ministry of finance on Tuesday said that an amount of Rs.312.2 billion has been provided to Sindh as part of its share in the collected revenue in eight months. In addition, an amount of Rs.57.5 billion has been provided as arrears for the last year.
Overall, the government of Sindh has received Rs27.1 billion more during the current financial year (July 2018 - February 2019) compared to the same period of last year.
According to the ministry, the Federal Board of Revenue (FBR) reports revenue collection to Finance Division twice a month (on 17th and last working day of the month).
The shares of the provinces are transferred on the same date as per the NFC formula. No amounts are withheld by Finance Division. It seems that the claim of shortfall is based on the assumption that revenue collection is evenly spread during the 12 months of the financial year, which is not the case.
Historically during the initial months of the financial year, the collections remain on lower side compared to the later part of the year with the highest collection recorded in June of every financial year. The federal and provincial fiscal authorities are aware of this fact and plan their expenditures accordingly.
The Ministry of Finance responded to the Sindh government. Sindh Chief Minister Syed Murad Ali Shah last month had said that the federal government is planning to take away the power of the provincial government to collect taxes.
He had disclosed that this year the province witnessed a shortfall of Rs104 billion from federal funds’ transfers and this would affect development projects.
He said: “This year the federal government has transferred Rs104bn less than the share of the provincial government.”
He said it was for the first time in the history of Pakistan that the federal funds’ transfers had come down compared to the previous year.
The chief minister explained that in January 2018 the federal government had transferred Rs56b while this January they had transferred only Rs38b.
