Topic:

National Finance commission (NFC)and

18 Amendment

Presented by: Syed M Hassan

National Finance Commission

NFC consists the distribution of taxes among federal govt and

provinces collected by federal GOVT sales Tax, corporate tax,
export duties Constitutional Requirement After every 5 Year
under Article 160.
Vertical Distribution:
Distribution among federal government and provinces.

Horizontal Distribution:
Distribution of resources among provinces.
Historical background of NFC

 Total 10 NFC award are given since 1973.

 Latest 7th NFC award were given in PPP Govt in 2010.

 Before 2010 resources sharing formula was based on a

Single factor population 40% were given to provinces.
Multiple Factor formula:

Multiple Factor formula was introduced in 18 Amendment:

 Population
 Revenue generation
 Poverty level
 Inverse population density
Picture of national resources

1. Tax revenues
2. Non Tax revenues
Tax revenues:

Tax revenues constitutes Divisible pool Resources in the pool

are divided among federation and provinces
include All taxes.
Vertical Distribution

 57.5% provincial share in Divisible pool

 42.5% of Divisible pool remains with federal Govt

Horizontal Distribution

Out of this 57.5%:

 Punjab gets 51.7%

 24.6% goes to Sindh
 KPK receives 14.6%
 Balochistan gets 9.1%
Horizontal Distribution

 Horizontal Distribution based on population

 Before 18th Amendment:

 Punjab 57.9%
 Sindh 23.34%
 KPK 13.39%.
 Balochistan 5.30%
THANK YOU!