ISLAMABAD - The federal government has deprived provinces of Rs117 billion under National Finance Commission (NFC) award during first quarter (July-September) of the ongoing financial year due to massive shortfall in tax as well as non-tax collection of the Center.

The federal government has transferred Rs416.5 billion to the four provincial governments during July-September period of the year 2016-17. In the first quarter the provinces were supposed to receive 25 percent (around Rs534 billion) of the total estimated amount of Rs2,135.9 billion from the center.

“The federal government is neither serious in constituting new NFC award nor is releasing the amount under the existing formula, which is creating problems for the provinces,” said KP government official. He said federal government had not called a single meeting of NFC in last one and half year to make a new formula for revenue sharing between the center and provinces.

The officials of the federal finance ministry and Federal Board of Revenue (FBR) informed The Nation that revenue collection remained slower which resulted in lesser transfer of revenues to the provinces under NFC.

The FBR faced massive shortfall in tax collection of Rs50 billion during first three months of the present fiscal, they said and added that United States too had not released Coalition Support Fund (CSF) money during the first quarter.

The 7th NFC Award expired on June 30, 2015; however, the federal government extended the 7th award for the previous as well as the ongoing financial years after failing to thrash out a new formula. The federal government had constituted the finance commission on April 24 last year and it held its first meeting on April 28.

Under the current NFC Award, Punjab gets51.74 percent share, Sindh 24.55 percent, Khyber Pakhtunkhwa 14.62 percent and Balochistan 9.09 percent.

The Punjab government has received Rs194.5 billion during first quarter of the current fiscal year, which is 18.6 percent of the annual share of Rs1045.01 billion. The federal government has released Rs104.7 billion to the Sindh provinces that is 11.7 percent of the Rs547.8 billion to be released in the year 2016-17.

Khyber Pakhtunkhwa would get Rs65.2 billion during July-September as compared to Rs346.2 billion of the ongoing year. KP received one percent additional funds under the NFC award due to the war on terror. The Balochistan province received Rs52 billion, which is 26.4 percent of Rs196.84 billion to be released in the ongoing financial year under NFC.

Meanwhile, a review meeting of National Finance Commission (NFC) working group-II was held under the chairmanship of non-statuary member of Sindh - Senator Saleem Mandviwalla - to discuss and finalise the demands of Sindh for the next NFC award in Karachi.

Senator Saleem said the federal government had announced that it will call the NFC meeting in November, but “we have not received the invitation yet; we are waiting for the meeting and have prepared our demand list. We hope that the federal government will announce the date of NFC meeting and it will be held in this month”.

In earlier meeting Saleem Mandviwalla criticised the federal government on delaying the new NFC award and decided to write a letter to the prime minister to convene the meeting of NFC award at the earliest.

The senator explained that Sindh government would present its case in the NFC meeting. Sindh would demand restoration of the FED on crude oil which was withdrawn by the federal government after the 18th Amendment, he added.

“After the 18th Amendment it is provincial subject and its collection should be handed over to the provinces. Currently the federal government is already collecting the excise duty on the gas well head price,” Saleem said.

The senator said that Sindh would also demand the collection of sales tax on goods, while royalty on oil and gas should also be handed over to the provinces.

The meeting decided that the demands of Sindh would be sent to the federal government before the NFC Award meeting and a preparatory meeting will also be held next week with KP in Peshawar. The review meeting was attended by the officials of Sindh finance department.