The National Finance Commission (NFC) convened in Lahore on Friday for its fifth meeting, during which it was decided that the 9th NFC Award will be finalised by December 31, a statement issued by the Ministry of Finance said.
It was also decided that improvements need to be brought in the federal and provincial governments' coordination regarding collection of taxes.
The meeting, chaired by Finance Minister Asad Umar, was a follow up to the first meeting held in February, in which six sub-groups to the commission were formed. The groups each gave a presentation on "various aspects of resource distribution as per the terms of reference assigned to the groups," read the statement.
The discussions remained focused on "the transparency, harmonisation and sharing of data", according to the press release.
The progress achieved in the two meetings was appreciated by all members of the Commission, who agreed to continue deliberations and present their reports in the subsequent meetings.
The finance minister recommended that future discussions also lay an emphasis on poverty alleviation and social sector spending.
According to the finance ministry statement, the representatives of Khyber Pakhtunkhwa "proposed a framework for NFC deliberations aimed at equalising fiscal resources across federating units, equal access to public services for all citizens of Pakistan and expenditure efficiency at all levels of the federation".
The framework was agreed upon by all the members, who also lauded the efforts put in by the KP government in this regard.
The chairman highlighted the importance of a "well deliberated and consensus-based NFC Award and said that all federating units shared a huge responsibility in that regard".
It was decided that full blown efforts will be made to finalise the Award by December 31. It was also agreed that the Commission will next convene for a meeting before the end of April and that session will focus on "Fata and the taxation aspects of ease of doing business."
The chairman also provided the members the assurance that provincial governments will be engaged in the "fiscal-related discussion with the International Monetary Fund (IMF)", the finance ministry's statement said.
The chairman also suggested that each federating unit nominate a focal person for data sharing so that the sub-groups can work more efficiently. He also urged that necessary measures be taken to strengthen the NFC Secretariat.
To this end, technical members from Sindh and KP volunteered to submit a proposal.
Talking to the media after the meeting, the finance minister said that it was a good omen that the federal, Punjab, KP and Sindh provinces had been assigned the coordination of one working group each, while Balochistan was tasked with the coordination of two working groups.
"The meeting also examined the demands, suggestions and recommendations of all five federating units and worked out future strategies and a line of action," he said.
The finance minister said there was a good spirit among all federating units during the deliberations to bring forth an improved NFC Award, ensuring a win-win situation for all.
He said that though right now, a final date can not be given for the announcement of the new NFC Award, but said that efforts are underway to have it completed by the end of the year.
"There are one or two matters upon which a principled stance needs to be adopted," said the finance minister.
"One of these matters is the development and betterment of Fata (formerly known as Federally Administered Tribal Areas), after its merger with KP, " he said and added that the nation has a strong resolve to expedite the development process in these areas.
Umar said that coordination among federal and provincial governments for tax collection had weakened for the last few years, asserting: “We want to strengthen the coordination on tax collection among the federal and provincial governments.”
'Spirit of collective benefits'
Punjab Finance Minister Makhdoom Hashim Jawan Bakht said that the process for the new NFC Award was afoot and was being carried out in very congenial manner. He said that the 9th NFC Award would be equally beneficial for all federating units and that there was a spirit of collective benefit among all the stakeholders.
KP Finance Minister Taimur Saleem Khan Jhagra said that efforts would be made to bring about improvements in accordance with the suggestions and consultations of all provinces. He said that entire country would contribute to the development of Fata.
Sindh NFC Member Asad Saeed said that there was a principled stance in the NFC meeting that the new NFC Award should be decided in a way that there should be no loss or extra benefit to any of the federating units.
"It is hoped that further deliberations on the Award would continue in the same cooperative manner," he said.
Balochistan NFC Member Mahfooz Ali Khan regretted that the wave of terrorism had now shifted from Fata to Balochistan, due to which its security expenditures had increased manifold. He stressed the need for formulating a mechanism to bring the Balochistan province at par with other provinces.