ISLAMABAD: The federal government on Tuesday said that Centre transferred share to Sindh in accordance with NFC resource distribution formula in first eight months of the current fiscal...
ISLAMABAD: The federal government on Tuesday said that Centre transferred share to Sindh in accordance with NFC resource distribution formula in first eight months of the current fiscal year.
However, Ministry of Finance did not explain that the FBR was facing revenue shortfall of Rs233 billion in July-Feb period of the current fiscal year so it was also impacting the shares of the provinces in accordance with proportion of their share out of federal divisible pool (FDP).
The Ministry of Finance in its statement said on Tuesday that it refutes the impression created by certain statements by representatives of the government of Sindh that there is delay in transfer of resources from the federal government to the provinces. It needs to be noted that 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 the Finance Division.
During the first 8 months of the current financial year an amount of Rs312.2 billion has been provided to Sindh as part of its share in the collected revenue. In addition an amount of Rs57.5 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.
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 statement concluded.