10th National Finance Commission constituted.

Byline: Khaleeq Kiani

ISLAMABAD -- Amid a fresh political debate on constitutional and financial powers of the federation and its units, the government on Tuesday constituted the 10th National Finance Commission (NFC) to announce a new award for sharing of federal divisible resources between the Centre and the provinces.

The Ministry of Finance formally notified the constitution of the 11-member commission after approval by federal and provincial members and its terms of reference by President Arif Alvi as required under Article 160 (1) of the Constitution.

However, the commission will effectively comprise 10 members given the president has also authorised the adviser to the prime minister on finance and revenue to chair meetings of the NFC in the absence of the federal finance minister. Otherwise, there is no room for the PM's adviser to be even a member of the commission under the Constitution. The commission will have four provincial finance ministers and four non-statutory members representing the provinces and the federal finance secretary as official expert.

Last NFC, formed in April 2015, failed to conclude a new award

The non-statutory members, one from each province, include Tariq Bajwa from Punjab, who resigned as governor of the State Bank of Pakistan when Dr Hafeez Shaikh was made adviser to the PM on finance and had previously served as federal finance secretary and chairman of the Federal Board of Revenue. He has replaced Dr Salman Shah who represented Punjab in the NFC that expired on April 23 this year.

Javed Jabbar, another heavyweight and former politician/minister, has been added to the new NFC as a non-statutory member from Balochistan in place of former provincial finance secretary Mahfooz Ali Khan in the previous NFC. Sindh and Khyber Pakhtunkhwa have continued with their past members Asad Sayeed and Musharraf Rasool Cyan, respectively.

The ToR set under clause 2 of Article 160 require the 10th NFC to distribute between the Centre and the provinces the net proceeds of five major tax categories, besides looking into expenditure requirements for special areas and special needs of the country. These include taxes on income, including corporation tax but not taxes on income consisting of remuneration paid out of the Federal Consolidated Fund. Also included in the list are taxes on sale and purchase of goods imported, exported, produced, manufactured or consumed and export duties on cotton, and such other export duties as...