Govt informs Fund revisiting award requires constitutional amendment (Catchline)
By our correspondent
ISLAMABAD: The Pakistan Peoples Party (PPP) objected to the International Monetary Fund’s (IMF) demand that Pakistan should revisit the National Finance Commission (NFC) formula, wondering why the global lender would push the Center to encroach on the provincial share.
The PPP has raised concerns just a day after the IMF called upon Pakistan to reopen discussions on the NFC award to address the ongoing imbalance in the distribution of fiscal resources between federal and provincial governments. IMF Mission Chief to Pakistan, Nathan Porter, raised concerns over the distribution of resources and responsibilities and underscored the need for a more equitable arrangement with newly-appointed Finance Minister Muhammad Aurangzeb during Pak-IMF talks for a $1.1 billion loan tranche.
PPP Vice President Senator Sherry Rehman, while reacting to the IMF’s demand has raised question regarding IMF’s involvement in Pakistan’s resource allocation formula. Senator Rehman while questioning the IMF’s alleged role in Pakistan’s resource allocation stressed that there is no indication of the global money lender seeking to interfere in Pakistan’s constitutionally agreed frame of resource allocation.
“There is no indication that the IMF is proactively seeking to meddle in Pakistan’s constitutionally agreed resource allocation frame,” Senator Rehman said, adding “Why would the IMF want to put itself in the middle of changing the NFC formula of Pakistan?”
Instead of eying at provincial share, Senator Rehman reminded that it seems it is the federal structure that cannot collect taxes, which incidentally the provinces are doing far better than the center. Rather than further encroaching on provincial shares, she said, the federal government should worry about improving tax collection through the Federal Board of Revenue (FBR).
“Since the 7th NFC Award, FBR taxes have remained stagnant in the range of 9% of the GDP, whereas provincial taxes have increased from 0.3% to over 1% of the GDP,” Rehman pointed out.
