ISLAMABAD: The President Mamnoon Husssain, Friday, approved the constitution of ten-members the 9th National Finance Commission (NFC) with Finance Minister Ishaq Dar as Chairman.
The First meeting of the 9th National Finance Commission (NFC) would be held on Tuesday April 28 here in the federal capital under the chairmanship of Finance Minister Ishaq Dar.
The first official NFC award was enacted under this program in 1974 which produced conclusive results while 7th NFC award was enacted by then President Asif Zardari after reaching united concessions with the four provinces in 2010.
In order to maintain inter-governmental fiscal relationship, Article 160 of the Constitution provides for setting up of a National Finance Commission (NFC) at intervals not exceeding five years.
The Finance Division, in pursuance of the presidential approval has notified constitution of the 9thNational Finance Commission (NFC) and under this notification, previous SROs issued in 2010 and 2011 have been dissolved.
According to the notification, Finance Minister Ishaq Dar is the chairman of the commission while all four provincial finance ministers and others including Dr. Aisha Ghaus Pasha to represent Punjab, Senator Salim Mandviwala to represent Sindh, Muhammad Ibrahim Khan to represent Khyber Pukhtunkhwa and Kaiser Bengali to represent Balochistan government while Federal Secretary Finance Dr. Waqar Masood will be member of the commission as official expert. The Finance Division shall provide secretariat support to the commission as per Rules of the Business, 1973.
A well placed source at Finance Ministry told this scribe that terms of the reference of the commission would have mandate to forward recommendations to the President on the distribution between the federation and the provinces of the net proceeds of the taxes income including corporation tax, but not including taxes on income consisting of the renumration paid out of the federation consolidated fund. The President, through Presidential Order, gives legal cover to the recommendations of the NFC.
The commission will also recommend allocation and distribution of taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed. Export duties on cotton, and such other export duties, duties of excise and other taxes specified by the President of Pakistan..
NFC will also make grants in aid by the federal governments to the provincial governments. Exercise by the federal government and provincial governments of the borrowing powers conferred by the constitution and assessment and allocation of resources to meet expenditures related to Azad Jammu and Kashmir government, Gilgit Baltistan, FATA and Natural Disasters and terrorism etc. Moreover, it will also take up any other matter related to finance referred to the commission by the President of Pakistan.
The Seventh National Finance Commission Award was signed here on Wednesday by the finance ministers of the four provinces and the federal government. The signing was witnessed by Prime Minister Yousuf Raza Gilani, Punjab Chief Minister Shahbaz Sharif, NWFP Chief Minister Ameer Haider Hoti, Balochistan Chief Minister Aslam Raisani and members of the federal cabinet, while Sindh Chief Minister Qaim Ali Shah signed the accord because he holds the portfolio of the provincial finance ministry.
Through this Award, the financial autonomy of the provinces has been strengthened by increasing their share in the Divisible Pool (taxes) from 50% to 56% in fiscal year, 2010-11 and to 57.5% from fiscal year 2011-12 onwards.
The 7th NFC award provides that the President shall constitute a National Finance Commission consisting of the Minister of Finance of the Federal Government, the Ministers of Finance of the Provincial Governments, and such other persons as may be appointed by the President after consultation with the Governors of the Provinces within six months of the commencing day and thereafter at intervals not exceeding five (consecutive) years.
It is pertinent to note here that the two NFC Awards enacted during the fiscal period of 1979 and 1984 remained inconclusive because President Zia ul Haq failed to reach consensus and ended in a deadlock. The fourth NFC award was declared in 1991 by the PML government after successfully reaching the concession with the four provinces.
The first fifth NFC Award was announced in 1995 which remained highly controversial. Soon, the second fifth award was announced in 1997. In 2002, the sixth NFC award under the NFC program was enacted by President Pervez Musharraf but failed to reach at a consensus decision. Although it was enacted but the sixth award’s results remained inconclusive.