ISLAMABAD/KARACHI: Federal transfers to the provinces will rise 37 per cent year-on-year to Rs7.438 trillion during 2024-25.
During the next fiscal year, Punjab’s share will be Rs3.69tr, followed by Sindh at Rs1.85tr and that of Balochistan is projected to be Rs667.55 billion. Khyber Pakhtunkhwa’s receivables during the next fiscal year, including 1pc additional as compensation for war-on-terror, will be Rs1.22tr.
The distribution of revenues to the provinces is made under the heading of divisible pool taxes and straight transfers, which includes eight taxes levied and collected by the federal government.
These are taxes on income, wealth tax; capital value tax taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed; export duties on cotton customs duties federal excise duties excluding the excise duty on gas charged at well-head and any other tax which may be levied by the federal government.
Besides, 1 per cent of the net proceeds of divisible pool taxes are assigned to Khyber Pakhtunkhwa to meet the expenses of the war on terror.
The divisible pool transfers to the provinces include a projected transfer of Rs7.24tr, with the major chunk belonging to the income tax at Rs3.05tr, followed by sales tax at Rs2.78tr, customs duty, and the federal excise duty at Rs1.39tr.
The straight transfer amounts to Rs195.17bn and it includes Rs24.50bn for the Gas Development Surcharge. The royalty on natural gas is Rs101.67bn, excise duty on natural gas is Rs11.59bn, and Royalty on Crude Oil is Rs57.48bn.
The transfers are divided under the National Finance Commission award, and the recommendations of the NFC have legal cover.
Published in Dawn, June 13th, 2024