October 15, 2002	Tuesday	Sha'aban 8, 1423

PESHAWAR, Oct 14: Smaller provinces have questioned the transfer of bigger chunk to a single province out of the total funds transferred annually to the federating units in lieu of octroi and zila tax since financial year 1999-2000, according to sources.

The issue, said the sources, had been raised at the platform of National Finance Commission (NFC), which has yet to evolve consensus on the distribution of 2.5 per cent additional GST allocation among provinces during the five-year operations of the new NFC award.

After the abolition of octroi and zila tax by the last Nawaz Sharif government in the financial year 1998-99, Punjab has been getting more than the amount the other three provinces received jointly every year since financial year 1999-2000.

Sindh, NWFP and Balochistan jointly got Rs9.646 billion in the financial year 1999-2000 and Rs8.13 billion each in 2000-01 and 2001-02.

Whereas, against that Punjab alone got R10 billion in lieu of octroi and zila tax in the financial year 1999-2000 and Rs9 billion each in the 2000-01 and 2001-02 financial years.

Separately, Sindh got Rs8 billion in the financial year 1999-2000 and Rs6.5 billion each in 2000-01 and 2001-02.

NWFP received Rs866 million each in all the three financial years. Balochistan got Rs780 million in 1999-2000 and Rs764 million each in 2000-01 and 2001-02.

The arrangement of distributing funds among provinces in lieu of octroi and zila tax, after their abolition in the financial year 1998-99, had been evolved on the basis of figures (of earning from octroi and zila tax) provided by the every province to the then federal government.

“Though the then NWFP government had based its claim in accordance with its local fund audit reports pertaining to income through octroi and zila tax in 1998-99, Sindh, Balochistan and Punjab’s shares had been determined on the basis of figures they submitted to the federal government,” said an Islamabad-based official requesting anonymity.

Punjab, Sindh, NWFP and Balochistan were transferred Rs10 billion, Rs8 billion, Rs866 million and Rs780 million, respectively, during the financial year 1999-2000.

However, except for NWFP, the annual share of the other three provinces under funds transferred to provinces in lieu of octroi and zila tax were revised downward for the financial year 2000-01, after their respective governments could not substantiate their claim by their audited accounts of octroi and zila tax for the financial year 1998-99.

“Punjab has been getting the funds since 1999-2000 without submitting local fund audit reports, making the other three provinces believe that Shahbaz Sharif-led government had made an inflated claim to receive greater amount out of the total funds provided to provinces in lieu of octroi and zila tax,” said the sources.