ISLAMABAD-The federal government would transfer Rs 1.72 trillion to the four provinces under the National Finance Commission (NFC) award in the upcoming financial year 2014-15 that is 21 percent higher than the amount transferred in outgoing fiscal year 2013-14.

The federal government would transfer Rs 1.72 trillion in next fiscal year to the four provinces as against the revised amount transferred Rs 1.41 trillion during outgoing year, showing an increase of 21.7 percent.

However, the amount transferring to the provinces would depend on the Federal Board of Revenue’s performance to achieve its revenue collection target next fiscal year. The provinces would not get Rs 1.72 trillion from federal government if FBR fails to achieve its target, as it happened in the outgoing financial year. The federal government was supposed to transfer Rs 1.5 trillion in outgoing fiscal year but it had to transfer only Rs 1.41 billion as FBR failed to achieve its target.  The federal government would transfer Rs 812.786 billion to Punjab in next financial year 2013-14 as compared to Rs 658.99 billion of the outgoing fiscal year. Similarly, the Sindh province would get Rs 464.007 billion in the upcoming financial year 2014-15 as against Rs 380.342 billion of the outgoing year.

According to the budget documents, the federal government would transfer Rs 283.68 billion to Khyber Pakhtunkhwa in next fiscal year as compared to Rs 235.05 billion of the outgoing year. The Khyber Pakhtunkhwa project would get one percent additional under NFC award due to the war on terror. The Balochistan province would get Rs159.71 billion in the upcoming financial year under NFC award as against Rs 138.95 billion of the outgoing fiscal year 2012-13.

The break-up of Rs 1.72 trillion to be transferred to the provinces showed that Rs1.58 trillion would be collected as Divisible Pool Taxes, Rs 137.48 billon to be accumulated as Straight Transfers and Rs 1.913 billion as General Sales Tax on services sector.  The break-up of Divisible Pool Taxes showed that Rs 660.66 billion would be collected as taxes on income, Rs 389 million as Capital Value Tax, Rs 667.49 billion as Sales Tax on goods, Rs 94.93 billion as Federal Excise Duty and Rs 157.32 billion as Custom duties in the next financial year 2014-15.

Similarly, the break-up of Straight Transfers showed that Rs 31.62 billion would be accumulated as royalty on crude oil, Rs 48.18 billion as royalty on natural gas, Rs 45.472 billion as Natural Gas Development Surcharge and Rs 12.214 billion as Excise Duty on natural gas in the upcoming fiscal year.

Meanwhile, Rs 1.913 billion would be collected General Sales Tax on services in next financial year 2014-15. Apart from transferring Rs 1.7 trillion under NFC award, the federal government would also transfer Rs 32.737 billion to the provinces as grants.

It is worth mentioning here that the provincial governments get shares from federal government under NFC award on the said formula, Punjab 51.74 percent, Sindh, 24.55 percent, Khyber Pakhtunkhwa 14.62 percent and Balochistan 9.09 percent.