Shortfalls in revenue collection: Information delay affecting plans, say provinces

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Finance Minister Saleem H Mandviwala (C).

ISLAMABAD: Provinces have protested against a delay in information provided by the federal government about shortfalls in revenue collection, as a result of which difficulties were being faced in adjusting expenditures.


The Federal Board of Revenue informed a biannual review meeting of the National Finance Commission here on Thursday that a revenue shortfall of around Rs200 billion was anticipated by the end of the current financial year in target set in the budget. It also told the provinces that their share in the federal divisible pool did not meet their budgetary projections because of monthly revenue shortfalls.


The provinces, therefore, demanded that they should be intimated about any shortfall in revenue at the end of every month so that they could on a timely basis make adjustments in expenditure. They were of the view that they book their expenditures in advance but come across their reduced revenue share at the end of a quarter, creating problems of cash flow.

The meeting presided over by Finance Minister Saleem H. Mandviwalla and attended by provincial finance secretaries and private members of the commission decided that NFC meetings should be held on a monthly basis for timely exchange of latest figures on revenue and expenditures.


The distribution of resources during July-Dec 2012 had taken place completely in accordance with shares defined by the NFC.


“To further streamline the process of implementation of NFC Award and to resolve any issue, the meeting of federal and provincial finance ministries will be held on a monthly basis” and will be presided over by the federal finance minister, an official statement said.


The meeting was informed that the FBR had reported a revenue collection of Rs865.06bn in the first six months of the current financial year. The provincial share in the divisible pool was worked out to be Rs485.63bn. Additionally, Rs12.97bn was released to Balochistan in order to match the budgeted figure of Rs114.21bn. Similarly Rs8.53bn (one per cent of net proceeds) was paid to Khyber Pakhtunkhawa on account of the war on terror. As such, the total amount of Rs507.13bn was transferred to four provinces.


The proceeds of royalty on crude oil reported by the ministry of petroleum and national resources up to Dec 31 last year had been distributed among the provinces strictly in accordance with provisions of the NFC award.


The meeting was informed that Sindh was entitled to receive grant-in-aid equivalent to 0.6 per cent of the provincial share in the divisible pool in lieu of losses on abolition of Octroi and Zila tax and an amount of Rs3.49bn was paid to the province as compensation.

Courtesy:  dawn

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