Enormous deficit in tax collection deprives provinces of Rs192 billion.

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...