ISLAMABAD - The Finance Ministry on Friday notified the 9th National Finance Commission (NFC) which would constitute the 8th award for devising new formula on resource distribution between the Centre and the four provinces.

The 9th National Finance Commission would consist of nine members – the federal finance minister, four provincial finance ministers, Ms Aysha Ghaus Pasha from Punjab, Professor Ibrahim Khan from KP, Kaisar Bengali from Balochistan and Senator Saleem Mandviwalla from Sindh.

The federal finance secretary would be official expert of the commission.

The first meeting of the 9th National Finance Commission (NFC) would be held on 28th of April 2015 with Federal Minister for Finance Senator Ishaq Dar in the chair.

The Finance Ministry also released the Terms of Reference (ToR) for the 9th NFC. Distribution between the federation and the provinces of the net proceeds of taxes, including corporation tax, but excluding taxes on income consisting of remuneration paid out of the federal consolidated fund; taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed; export duties on cotton and such other export duties, duties of excise and such other taxes as may be specified by the President.

The other ToRs, including making of grants-in-aid by the federal government to the provincial governments; exercise by the federal government and the provincial governments of the borrowing powers granted by the Constitution and assessment and allocation of resources to meet expenditures related to Azad Jammu and Kashmir, Gilgit-Baltistan, Fata, natural disasters and terrorism.

The Finance Division shall, as per the rules of business, 1973, provide the secretariat support to the Commission.

According to the notification, the National Finance Commission notified vide Gazette of Pakistan Extraordinary SRO 676(I)/2010, dated 21st July 2010 and SRO 773(I)/2011, dated 18th August 2011, shall stand dissolved with immediate effect.

The constitutional life of the current NFC award will automatically end on June 30, 2015. Due to shortage of time, the federal government had been considering ways to extend the revenue-sharing arrangement for another year, beyond the constitutionally protected five-year period.

The 7th National Finance Commission award guarantees the provinces’ share at 57.5 percent of net federal tax receipts. According to the 7th NFC formula, Punjab’s share stood at 51.74 percent, Sindh 24.55 percent, KP 14.62 percent, including one percent as share of war against terror, and Balochistan 9.09 percent.

“Under the new round of National Finance Commission (NFC) negotiations, the federal government will seek an agreement to balance devolution of revenue and expenditure responsibilities in a way that is consistent with the objective of macroeconomic stability and long-term sustainability of intergovernmental fiscal relations.

The new National Finance Commission  negotiations are scheduled to begin in the coming months,” Pakistan stated in Memorandum of Economic and Financial Policies written to IMF.