Khyber-Pakhtunkhwa on Wednesday opposed any move to reduce provincial shares of federal taxes through a constitutional amendment, calling instead for such matters to be resolved through a new National Finance Commission (NFC) allocation. Addressing a press conference, Chief Minister’s Adviser on Finance Muzammil Aslam said that any change in revenue sharing between the Center and the provinces must be decided through consensus within the NFC.
"Parliament is not the forum for this issue – it requires agreement between all five stakeholders: the four provinces and the federation," he claimed. He called on the Federal Government to immediately issue a notice for the first NFC meeting tentatively scheduled for November 18, noting that no formal notice had yet been released. The renewed debate on NFC arose this week after Pakistan Peoples Party Chairman Bilawal Bhutto-Zardari revealed the government’s agenda for the 27th (Constitutional) Amendment through a post on social media. The NFC is chaired by the federal finance minister and the four provincial finance ministers are its members, with the decision taken by consensus under the constitution. However, a constitutional amendment requires a two-thirds majority. Muzammil also opposed the return of the subjects of education and population planning to the federal government, saying when the federal government cannot manage its own expenditure, how can it take care of new departments. Muzammil criticized the federal government for its failure to curb spending and keep an eye on the provinces’ stocks. Similar sentiments were also expressed by a senior leader of the Pakistan Peoples Party. The federal government wants to cut the throats of the provinces by rolling back NFC because the federal government cannot manage its fiscal space, Syed Naveed Qamar of PPP said while addressing a seminar. Finance Minister Muhammad Aurangzeb also this week refused to comment on the government’s proposal to take charge of the two provincial subjects and end the guaranteed minimum share of the provinces.
"This discussion belongs to NFC, where it will take place," Aurangzeb said, refusing to comment on proposals to roll back the devolution of education and population welfare or to end the constitutionally guaranteed 57.5% provincial share in the federal divisible pool. But Muzammil Aslam questioned whether the federal government would also take responsibility for 315,000 employees of the provincial education department, which is 45% of the total employees of the KP government. He said that the KP government spends 22% of its budget on education and the federal government cannot do the same, which will compromise the quality of education in the province. KP’s finance adviser suggested revising the criteria for determining provincial shares in the NFC, shifting focus from a predominantly population-based formula to factors such as forest cover, development of water reservoirs and reduction of out-of-school children.
