ISLAMABAD - The federal government will transfer Rs2590 billion to provinces under the National Finance Commission award in the budget for the fiscal year 2018-19.

The government has prepared the budget on the basis of the 7th NFC award as the government failed to constitute a new revenue sharing formula between the centre and the four provinces. The government would extend the 7th NFC award for the consecutive fourth year as the previous award expired in June last year. The provincial governments get shares from the federal government under NFC award as per the said formula. Punjab gets 51.74 percent, Sindh 24.55 percent, Khyber-Pakhtunkhwa 14.62 percent and Balochistan 9.09 percent.

The federal government has increased the provinces share by 11.82 percent for the upcoming fiscal year under the NFC. The government would transfer Rs2590 billion to the provinces during the FY-208-19 against Rs2316 billion of the outgoing year. The amount to be transferred to the provinces would depend on the Federal Board of Revenue’s performance to achieve its collection target of Rs4.5 trillion in the fiscal year 2018-19.

The federal government would transfer Rs1281.98 billion to Punjab in the next fiscal year against the Rs1138.4 billion of the current fiscal year. Sindh will receive Rs648.8 billion in the FY-2018-19 as compared to Rs584 billion of the outgoing year.  Khyber-Pakhtunkhwa will receive Rs426 billion against Rs381 billion in the ongoing year. KP would get one percent under the war on terror. The federal government would transfer Rs233 billion to Balochistan in next fiscal year as compared to Rs212.3 billion last year.

The break-up of Rs2590 billion showed that Rs2508.8 billion would be transferred from the divisible pool, which was Rs2230 billion in the outgoing year.

Meanwhile, the federal government would transfer Rs81.2 billion as straight transfers during the next financial year that was Rs86 billion in the outgoing year.

The breakup of divisible pool taxes showed that Rs970.7 billion would be collected as income tax, Rs3.68 billion capital value tax, Rs973 billion sales tax on goods, Rs144.2 billion federal excise duty and Rs417.2 billion customs duty in the fiscal year 2018-19.

Similarly, the breakup of straight transfers showed that Rs16.5 billion would be accumulated as royalty on crude oil, Rs35.8 billion as royalty on natural gas, Rs15.7 billion as natural gas development surcharge and Rs13.28 billion as excise duty on natural gas

The five-year constitutional term of the financial arrangement expired on June 30, 2015, however, the Pakistan Muslim League-Nawaz government paid no heed to the demand of the provinces for constituting a fresh revenue sharing formula.