Provinces expect to get Rs3.411tr under NFC Award

ISLAMABAD: The provinces expected to get Rs3.411 trillion in the new fiscal year of 2020-21 from their share in federal revenues under the National Finance Commission (NFC) Award and straight transfers reflecting a 18.72 percent over budgetary allocation for the financial year 2020-21 which were estimated at Rs2.87 trillion.

However, this time the government did not give the figures of the revised estimates of allocation to provinces. Out of the total revenues of the federal government in 2021-22, Punjab stands to get Rs1.69 trillion, Sindh Rs848.208 billion, Khyber-Pakhtunkhwa Rs558.25 billion and Balochistan Rs313.296 billion in the new fiscal year of 2020-2021.

While in ongoing fiscal year 2020-21, the Punjab was allocated Rs1.43 trillion, Sindh was allocated a Rs742.030 billion for the current fiscal year, Khyber Pakhtunkhwa was allocated Rs477.519 billion for the current fiscal year and Balochistan which was allocated Rs265.054 billion for the current fiscal year.

The break-up of Rs3.41 trillion which would be transferred to the provinces under the NFC formula, showed that Rs3.31 trillion would be transferred from the divisible pool. The break-up of divisible pool taxes showed that Rs1232.87 billion would be collected as income tax, Rs32 2 million capital value tax, Rs1435.588 billion sales tax (Excluding GST on Services), Rs197.286 billion federal excise duty and Rs444.41 billion customs duty in the fiscal year 2021-2022.

Similarly, the breakup of straight transfers showed that Rs23.19 billion would be accumulated as royalty on crude oil, Rs52.736 billion as royalty on natural gas, Rs15.867 billion as natural gas development surcharge and Rs14.705 billion as excise duty on natural gas.

The provinces agreed sharing divisible pool under the National Finance Commission award that will take place on the basis of 82 percent population, 10.3 percent poverty and backwardness, five percent on revenue collection/generation and 2.7 percent on inverse population density. One percent of the net proceeds of the divisible pool would be assigned to the government of Khyber-Pakhtunkhwa to meet the expenses on the war on terror.