Khyber-Pakhtunkhwa on Wednesday opposed any move to reduce the provincial share of federal taxes through an amendment to the Constitution, instead urging that such matters be resolved through fresh adjudication by the National Finance Commission (NFC). Addressing a press conference, Chief Minister’s Finance Advisor Muzammil Aslam said any change in revenue distribution between the Center and provinces should be decided by consensus within the NFC.
"Parliament is not the forum for this issue; requires an agreement between the five interested parties: the four provinces and the federation," he stated. He called on the federal government to immediately issue a notification for the first NFC meeting, tentatively scheduled for November 18, noting that no formal notice had yet been issued. The renewed debate over NFC emerged this week after Pakistan People’s Party Chairman Bilawal Bhutto-Zardari revealed the government’s agenda for the 27th (constitutional) amendment through a social media post. The NFC is chaired by the federal finance minister and the four provincial finance ministers are its members, where the decision is made by consensus according to the constitution. However, a constitutional amendment requires a two-thirds majority. Muzammil also opposed returning education and population planning issues to the federal government, saying that when the federal government cannot manage its own expenses, how can it take charge of new departments? Muzammil criticized the federal government for not containing spending and for not focusing on the actions of the provinces. A senior Pakistan People’s Party leader also expressed similar sentiments. The federal government wants to cut the throats of the provinces by rolling back the NFC because the federal government cannot manage its fiscal space, PPP’s Syed Naveed Qamar said during a seminar. Finance Minister Muhammad Aurangzeb this week also declined to comment on the government’s proposal to take responsibility for the two provincial subjects and end the provinces’ guaranteed minimum share.
"This discussion belongs to the NFC, where it will take place," Aurangzeb said, declining to comment on proposals to reverse the devolution of education and population welfare or to end the constitutionally guaranteed 57.5 per cent provincial share of the federal divisible fund. But Muzammil Aslam questioned whether the federal government would also take responsibility for 315,000 employees of the provincial education department, which is equivalent to 45% of the total employees of the KP government. He said the KP government spends 22% of its budget on education and the federal government cannot do the same, which will compromise the quality of education in the province. The KP’s financial advisor proposed revising the criteria for determining provincial shares in the NFC, shifting the focus from a predominantly population-based formula to factors such as forest cover, water reservoir development and reducing the number of out-of-school children.
