ISLAMABAD   -    The massive shortfall in tax collection at federal level had deprived provinces from Rs192 billion in their due share from the federal divisible pool in last fiscal year.

 The federal government had transferred Rs2397.8 billion to the four provinces under National Finance Commission (NFC) award in financial year 2018-19. The provinces were supposed to receive Rs2590.1 billion from the federal government under the divisible pool.  The provinces had to pay the price of inability of Federal Board of Revenue (FBR), which had failed to achieve its annual tax collection target by Rs570 billion despite introducing mini budgets. The FBR had collected Rs3829.4 billion as against the target of Rs4390 billion. Due to the reduction in revenue shares, the provinces were unable to give targeted surplus budget. The four provincial governments recorded budget surplus of Rs138.9 billion during the last fiscal year. The government had budgeted provinces to give budget surplus of Rs285.6 billion during the previous fiscal year.

The four provinces had failed to enhance their tax collection during the year 2018-19. The tax collection of the four provinces had recorded at Rs401 billion during previous fiscal year. There was no increase in provincial tax collection in year 2018-19 as compared to the preceding year 2017-18. The provinces had heavily depended on the funds received from federal government under divisible pool. The federal government had transferred Rs2397.8 billion to the provinces under NFC award, which helped the provinces in generating surplus budget. Under the 7th NFC award, the federal government is bound to transfer 57.5percent of the resources to the four provinces. The provincial governments get shares from the federal government under NFC award as per the said formula. Punjab gets 51.74percent, Sindh 24.55percent, Khyber-Pakhtunkhwa 14.62percent and Balochistan 9.09percent.

Punjab had recorded budget surplus of Rs48.8 billion. The expenditures were registered at Rs1372.4 billion as compared to the revenues of Rs1421.2 billion. However, the major chunk of the revenues came from the federal government under divisible pool. The Punjab government had received Rs1167.4 billion from the federal government as against it annual share of Rs1282 billion. Meanwhile, the province had generated only Rs192.6 billion from its own sources.  Tax collection of Punjab provinces had reduced in previous fiscal year. Punjab had collected Rs197.5 billion in the preceding year.

Sindh had shown budget surplus of Rs55.6 billion, as its expenditures recorded at Rs765 billion compared to the revenues of Rs820.6 billion. Sindh government has received Rs600 billion from the federal government during the year 2018-19 as compared to its projected share of Rs648.8 billion during entire current fiscal year. The Sindh government collected Rs177.9 billion during the year 2018-19. Tax collection in Sindh is higher among four provinces of the country.

The KPK’s budget surplus had recorded at Rs17.1 billion. Expenditures of this province had registered at Rs472.1 billion as compared to the revenues of Rs489.2 billion.  The KPK’s tax collection has also enhanced marginally to Rs19.8 billion in the year 2018-19 as compared to the Rs18.3 billion in the preceding year 2017-18. The province has received Rs393 billion from the federal government under NFC.