NFC National Finance Commission
NATIONAL FINANCE COMMISSION
PART: 6 FINANCE, PROPERTY, CONTRACT AND SUITS
COMPOSITION 160 (1)
The government after its election within 6 months from commencing day not exceeding 5 years would constitute National Finance Commission.
President of Pakistan shall constitute the Commission as follow.
Federal Government= Finance Minister
Provincial Government= Finance Ministers
Other Persons= President appoint in consultation with Governors of the Provinces.
FUNCTIONS OF THE NATIONAL FINANCE COMMISSION
160 (2) Under the Article, the Commission makes the recommendations in following regards.
160 (2) a DISTRIBUTION
The Commission distributes the Net Proceed on taxes between the Federation and Provinces. For example, if Government gets 1 lac of taxes. It would have say 80, 000 rupees as it net proceeds. Because, the rest of 20, 000 rupees would be its expenditures etc.
(b) GRANTS IN AID
Likewise, the Government allocates special funds for particular projects, institutions, local government or scholars in Provinces. Such funds come under the category of grants in aid from Federation to Provinces.
(c) BORROWING POWER
The NFC decides the limit of borrowing power of the provinces. It shall make to what extent a Province can lend money. However, the commission shall exercise such powers under constitutional limits.
(d) PRESIDENT REFER MATTERS
President of Pakistan may also refer the matters relating to the Commission for its recommendations.
TAXES 160 (3)
So, National Finance Commission distribute the income from the taxes raised under authority of Majlis e Shoora (Parliament). These taxes include following.
- INCOME TAXES= collected on income including corporation taxes. However, not including taxes on income of remuneration paid out of Federal Consolidated Fund.
- GOODS TAXES= Similarly, taxes on sales, purchase, import and export. And taxes collected on goods produced, manufactured or consumed.
- EXPORT DUTIES= Duty is a state tax. It is a transit tax levied on commodities passing through custom areas en route to another country. The money from export duty and any other duty which the President may determine.
- EXCISE DUTY= President of Pakistan specifies this duty.
- OTHER TAXES= Or any other taxes which the President specifies.
NFC National Finance Commission
PROVINCE SHARE 160 (3 A)
The share of each Province in NFC award shall not be less than in the previous award.
MONITORING IMPLEMENTATION 163 (3 B)
Federal Finance Minister and Provincial Finance Ministers monitor Award implementation biannually. Also, they would lay reports before both Houses and Provincial Assemblies.
PRESIDENT SPECIFICATIONS 160 (4)
Furthermore, after receiving NFC recommendations, the President shall specify share of net proceeds. He shall allocate and decide money to pay each province.
But no money from the consolidated fund as per provision of article 78 of the constitution of Pakistan.
RECOMMENDATIONS/ ACTIONS REPORTS 160 (5)
NFC recommendations and explanatory memorandum of actions taken include in a report. This report shall be presented before both houses and all provincial assemblies.
AMENDMENT BEFORE SPECIFICATION 160 (6)
President under clause (4) reserves the right. He at any time before order of specification may amend/modify in law relating to distribution of revenue.
GRANTS IN AID 160 (7)
Head of the State, President, shall make grants in aid to revenue of Provinces in need of assistance. However, such grants charge upon Federal Consolidated Fund.