|
Provincial share will be increased by 1.25% in NFC Award
·
Total revenue
share from taxes, 2.5 percent additional GST, aid grants to increase
NFC provincial share by 50 percent in 2010-11
By Sajid Chaudhry
ISLAMABAD: Under the interim National Finance Commission (NFC)
Award, the provincial share in the divisible pool will be increased
by 1.25 percent.
The NFC award will also include an upward revised share of 45
percent in the coming fiscal year, from last year’s 43.75 percent.
Due to the increase in the provincial share from the divisible pool
and all other sources - federal taxes, additional 2.5 percent
general sales tax (GST) and grant in aid - the overall share of
provinces will reach 49 percent in the coming year.
The federal government has indicated to the provinces that fiscal
transfer in the next year will be Rs 590 billion and the amount
would be distributed among the provinces as per the new allocation
of 45 percent, and the overall share of 49 percent.
Under a presidential order and Distribution of Revenues and
Grants-in-Aid (Amendment) Order, 2006, the provincial share will
increase to 46.25 percent in the fiscal year 2010-11.
Total share: Total revenue share from all federal taxes, the share
from 2.5 percent additional GST and aid grants will raise the NFC
award by as mush as 50 percent in the year 2010-11.
According to interim NFC provision the provinces will receive the 45
percent share from nine types of taxes and duties, namely income
tax, wealth tax, capital value tax, taxes on sales and purchases,
sales tax on services (federal excise mode), customs duties, federal
excise duties excluding the excise duty on gas charged at well head
and all other taxes that the federal government may levy.
The share of all four provinces in the upward revision of 45 percent
is as follows: Punjab has been allotted 57.36 percent, Sindh will
get 23.71 percent, the NWFP will receive 13.82 percent and
Balochistan is to get 5.11 percent.
The government had levied 2.5 percent additional GST and had
abolished the Octori tax during the second premiership of Nawaz
Sharif. Of the proceeds from the additional GST, 1/6 will be
distributed to the provinces, which will be required to transfer the
amounts to the district governments and cantonment boards without
retaining any part of the payment.
The provincial share of the additional GST proceeds is as follows:
Punjab is to get 50 percent, Sindh 34.85 percent, the NWFP will
receive 9.93 percent and Balochistan will get 5.22 percent in
2008-09.
The balance share from the divisible pool will be as follows: Punjab
57.36 percent, Sindh 23.71 percent, the NWFP 134.83 percent and
Balochistan 5.11 percent.
The aid grant, which was fixed at Rs 27.750 billion in 2006, will be
increased in the fiscal year 2009-10 in line with the growth in
revenue from the divisible taxes. The provincial share in the next
fiscal year earmarked in the Federal Consolidated Fund is: Punjab 11
percent, Sindh 21 percent, the NWFP 35 percent and Balochistan 35
percent.
·
Daily
Times:June 7, 2009
|
