Centre may accept tax collection as criterion: Resources distribution
By Sabihuddin Ghausi
KARACHI, April 27: The federal government is understood to have agreed in principle the Sindh’s demand to include revenue collection as one of the criteria for distribution of revenue among the provinces. Sindh collects almost 70 per cent of the national taxes and has been agitating for decades to make tax collection as one of the criteria of resources distribution among the provinces. The NWFP and Balochistan want backwardness and the size of the province are given weightage in resources distribution arrangement. Punjab is the only province that insists on keeping population as the only basis of resources distribution.
An indication of Islamabad’s inclination towards accepting Sindh’s demand is the participation of Syed Sardar Ahmad, the provincial finance minister in an informal meeting of the finance ministers of the provinces on Thursday at Islamabad. The Sindh finance minister is reported to have been instructed by his party, the Muttahaida Qaumi Movement (MQM) to stay away from any formal or informal meeting convened by the federal government for evolving a revenue distribution formula if Islamabad does not show any hint of accepting Sindh’s position.
“The fact that Sindh Finance Minister is attending the informal meeting of the finance ministers at Islamabad on Thursday manifests Islamabad’s consent on making revenue collection as one of the three or four criteria for resources distribution among the provinces,” a well placed and authoritative source told Dawn on Wednesday evening.
Efforts made to reach Syed Sardar Ahmad on Wednesday evening proved futile as he was reported to be in meeting with Nazar Sheikh, the Sindh government nominee on the National Finance Commission (NFC) as a private member.
Senior officials of the Sindh government were also in session with the finance minister till late in the evening. Sardar Ahmad is leaving for Islamabad on Thursday morning where the Prime Minister has convened an informal meeting of the four provincial finance ministers in the afternoon.
“What would be the ratio of taxes collection in the resources distribution formula will be ascertained in the informal meeting on Thursday,” the source added who was unaware of response of other provinces particularly of Punjab on Federal government’s consent to accept Sindh’s demand.
In 2002 just before elections the Sindh government had agreed even on 2 per cent weightage for the revenue distribution formula in which population was to be given 96 per cent ratio. The proposal suggested to give only two per cent ratio each for economic backwardness and size of the province.
But the Punjab did not agree even on this two per cent token weightage for the revenue collection in the NFC formula and the negotiations ended in a stalemate.
Now that the constitutional term of the 1997 NFC award has expired in 2002 and it would have been the third consecutive year without any fresh NFC formula, the bitterness and anger in Sindh, Balochistan and NWFP is mounting with every passing day. In Balochistan, the growing frustration is manifesting in bomb blasts and rockets firing on the sensitive and strategic installations.
The Prime Minister, who is also looking after the Financial and Economic Assistance portfolios in the cabinet has despatched State Finance Minister Umar Ayub and his Advisor on Finance Dr Salman Shah to Peshawar and Lahore in March to discuss with NWFP and Punjab leadership the NFC issues. The Prime Minister has a lot of stake in the consensus NFC formula before the next budget.
