LAHORE, June 4: The finance ministers of the four provinces have decided to ask the federal government to resolve all outstanding finance-related issues and transfer the sales tax collection on services to the federating units.

The decision was taken at an informal meeting here on Wednesday.

“Currently, the Federal Board of Revenue deducts two per cent as charges for collecting sales tax, which is a provincial tax. We are capable of collecting it ourselves and we need it to improve our financial resources.

“We have also agreed to urge the federal government to reduce its collection charges on sales tax on industry to two per cent from the present five per cent. That will also improve our revenues,” Punjab Finance Minister Tanvir Ashraf Kaira told reporters after the meeting.

He was accompanied by the finance ministers of the NWFP and Balochistan, Ahmad Husain Shah and Syed Asim Kurd, and Sindh’s senior minister Pir Mazharul Haq.

The meeting did not take up the contentious issue of the National Finance Commission.

“The issue of the NFC Award is a very complicated one. Therefore, we did not discuss it. That said, there is a room for improving the (NFC) formula (under which resources are distributed between the Centre and the provinces and among the provinces). We will have to work in the given situation till a new NFC Award is finalised,” Mr Kaira said.

However, he said, the ministers had agreed to urge the federal government to release the hydel power projects royalty dues owed by Wapda at the earliest.

The NWFP accuses that Wapda of delaying payment of royalty of Rs129 billion.

Similarly, Punjab is demanding an accumulated royalty of Rs15 billion on Ghazi Barotha hydel project and Sindh says Wapda owes it Rs14 billion.

Also, the provinces want the federal government to allow them to borrow from commercial banks and other institutions.

Mr Kaira said the ministers agreed that the provinces should be allowed to implement the development projects that the federal government intended to undertake under its annual Public Sector Development Programme.

“That will ensure complete utilisation of the funds. We also want that PSDP funds, which remain unutilised at the end of fiscal year, for projects to be carried out in the provinces should not be allowed to lapse.”

Additionally, the provinces want that the audit of their accounts should be transferred to them from the Accountant General of Pakistan. “We want also that the instrument of power of attorney be made renewable to help the provinces improve their revenues,” Mr Kaira said.

He said Punjab, Sindh and the NWFP had agreed to request the federal government to support Balochistan, which was facing severe financial difficulties because of huge federal loans.

An official privy to the meeting said the ministers decided to tax luxury cars and jeeps to broaden provincial resource base.