Big businesses make case for renegotiating NFC award
Big businesses have demanded that the National Finance Commission (NFC) award, which is the basis for resource distribution among federal and provincial governments, should be renegotiated to enable the federation to manage its fiscal account. The Pakistan Business Council (PBC), which is a policy advocacy platform backed by some of the biggest private-sector companies, said the provinces should be incentivised to raise taxes and adopt cost-efficient spending. “While the federation incurs an unsustainable fiscal deficit, (the) provinces have a reduced incentive to raise taxes. In most years, they also record a budget surplus,” it said in a detailed report titled Minimum Consensus on Key Economic Reforms on Monday. The prevailing NFC award sets aside a provincial share of 57.5 per cent in the so-called divisible pool, which consists of income and corporate tax, sales tax on goods, and excise and import duties collected by the federal government. The remaining 42.5pc funds under the divisible pool stay within the federal government.