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February 15, 2020

Centre provides Rs1,501b to provinces under NFC Award in current fiscal

Peshawar

February 15, 2020

ISLAMABAD: The National Assembly's Standing Committee on Finance was informed that the Centre has so far provided Rs 1,501 billion to the provinces under the National Finance Commission (NFC) Award in the first seven months (July-Jan) period of the current fiscal year.

The NA panel also constituted a sub-committee under Chairman Dr Ramesh Kumar and comprising Dr Aisha Ghous Pasha from PML-N and Dr Nafisa Shah from PPP as other members with the mandate to resolve the long outstanding issues of stuck-up tax refunds of textile and other export-oriented sectors. The National Assembly's Standing Committee on Finance met under Chairmanship of Faiz Ullah here at the Parliament House in which the panel also approved Tax Laws (Second) Amendment Bill 2019. The bill was rejected by Senate panel.

Briefing about the provincial shares under the NFC Award, the Finance Ministry’s Additional Secretary, Sohail Rajput, informed the committee that the provinces were supposed to get a share of Rs3,153 billion in the current fiscal year out of total FBR’s envisaged target of Rs5,550 billion. The FBR has so far collected Rs2,369 billion taxes in the first seven months, so the provinces were transferred Rs1,501 billion. Out of the total transferred amount of Rs 1,501 billion to all federating units, Punjab got Rs746 billion, Sindh Rs354 billion, KP Rs236 billion and Balochistan Rs164 billion so far. It is estimated that the provinces will be provided an additional Rs100 billion out of the NFC fold in the shape of royalty and other heads and in that context Rs65 billion were already provided to them.

The Finance Ministry also stated that the development budget was earmarked at Rs701 billion at the federal level in shape of the Public Sector Development Program (PSDP), out of which so far the government has released Rs 299 billion. It is hoped that the released amount of development funds would go up to Rs450 billion till the end of March 2020. The NA Panel also sought details of the Non-Tax Revenue collection target of Rs 1,400 billion. The ministry has assessed that the running of the civil government would consume Rs440 billion out of which Rs220 billion were so far utilized in the first seven months of the ongoing financial year.

The senior officials of the Finance Ministry told the NA committee that the budget deficit target was envisaged at 7.5 percent of GDP for current fiscal year against 9.8 percent of GDP in the same period of last financial year.

On stuck-up tax refunds issues, the members of the NA panel were of the view that if additional sales tax, CNIC condition, and refunds issues were not resolved, then the textile units at Faisalabad would shut down in two weeks. The FBR’s Member Inland Revenue Operation, Seema Shakil, told the committee that there were 12,984 cases of refunds with involved refund claims of amount of Rs54 billion out of which Rs37 billion claims came along with form H. She said that the FBR had released refunds of Rs29 billion out of total Rs 37 billion received claims. The FBR officials made it clear that the parliament passed the law to impose the condition of CNIC and its implementation has kick-started from this month.