ISLAMABAD, Feb 6 (APP):The National Finance Commission (NFC) Wednesday decided to formulate six working groups in various sectors which would be coordinated headed by all provinces and the federal government.
“It has been decided in the meeting that all provinces would be given lead in the working groups whereas the federation would also lead one working group,” Minister for Finance said while talking to APP after the meeting.
The inaugural meeting of the reconstituted 9th NFC was held here presided over by Finance Minister Asad Umar.
The meeting decided that Punjab would lead a working group to make proposals and recommendations on Macroeconomic framework and benchmarking, while the Federal government would coordinate the group aimed at vertical distribution of the divisible pool taxes between federation and provinces including needs of AJ&K and GB.
Similarly task for horizontal distribution of divisible pool taxes amongst provinces would be coordinated by Baluchistan and measures required to be taken to simplify tax procedures and payment systems to facilitate businesses would be coordinated by Sindh.
Khyber Pakhtunkhwa would lead the group with a task of Integration and merger of FATA in Khyber Pakhtunkhwa.
Asad Umar said that a secretariat would be establish in the federal capital where research and other works would be done.
The minister said that during the meeting, a detailed list of different tasks and works to be done by the NFC was prepared and it was jointly decided that the provinces as well as the federation must have to increase their resources for socio-economic development of the country.
“The NFC is an important platform where big decision both with respect to economy as well as politics would be made, therefore these decisions must have to be done unanimously,” he added.
Meanwhile according to a statement issued by the ministry of finance, Asad Umar said NFC had been tasked under the Constitution with amicable distribution of financial resources among the federation and the provinces, and as such its effective role had an important bearing on overall national cohesion.
He said that apart from distribution, the NFC should also address critical issues related to developing a sustainable fiscal structure for center as well as the federating units.
It should also address the social development and poverty alleviation challenges and facilitate the private sector with a view to foster economic development opportunities for the general public.
Federal Secretary Finance briefly recounted the history of NFC awards and shared with the participants details on fiscal position of the federal government. He apprised the meeting about federal fiscal operations and net revenues of federal and provincial governments.
Provincial Ministers, and Secretaries Finance updated the meeting on their fiscal position and also in the process dilated on issues faced by them in different spheres due to resource constraints.
The ever rising burden of pension payments, allocation for FATA and need for improved coordination on data sharing were highlighted.
They also shared with the meeting proposals on transfer of funds as well as possible future models of revenue generation.
Representative from Baluchistan highlighted the fiscal challenges and the progress being made by the Province through inter-provincial cooperation and support.
He also emphasized better and increased use of automation for revenue generation.
Khyber Pakhtunkhwa raised the issue of net hydel profit and difficulties being faced on account of funding required for retirement benefits of employees.
Secretary Finance Punjab called for improved coordination between federal and provincial authorities for timely data sharing. Member Sindh pointed out less transfers made under the heads “Straight Transfers” and proposed that data on this account may be shared with Provinces.
The participants laid emphasis on smooth vertical and horizontal transfer of funds. The participants also emphasized on the need to end regional disparities.
Chairman Federal Board of Revenue (FBR) on the occasion briefed the meeting on revenue generation in the current financial year.
The participants of the meeting were of the opinion that both the federal government as well as the provinces were under-resourced and that additional revenue was needed to meet expenses in different realms including socio-economic development activities.
The need was also felt for more clarity on revenue projections by FBR so that the provincial governments could plan adjustments in expenditure accordingly.
The meeting expressed agreement to Finance Minister Asad Umar’s suggestion for including the provinces in the process of dialogue with International Monetary Fund (IMF) with regard to the fiscal targets over the medium term.
The Finance Minister called upon all the members to contribute their best towards formulating a new NFC award in future.
Chief Minister Sindh, Murad Ali Shah, Finance Minister Punjab, Makhdoom Hashim Jawan Bakht, Finance Minister KP, Taimur Saleem Khan Jhagra, Federal Secretary Finance, Provincial members, Provincial Secretaries Finance and senior officials of the Ministry of Finance attended the meeting.
