By Staff Reporter
PESHAWAR: Pakistan’s Khyber Pakhtunkhwa province has refused to accept a federal government plan to deduct 6.4 billion rupees from its share of monthly revenue transfers, deepening a fiscal standoff between Islamabad and one of its four provinces over control of constitutionally mandated funds.
The dispute centers on a directive the Finance Ministry sent Aug. 5 to the Accountant General of Pakistan Revenues office in Peshawar, instructing that the sum be withheld at source from transfers due to the province for July. The ministry’s letter described the amount as adjustable within the 2026-27 fiscal year accounts and asked for confirmation once the deduction had been processed.
The provincial Finance Department pushed back four days later, telling the Accountant General’s Peshawar office that no such deduction had been authorized. In a letter reviewed by Dawn, the department said the underlying memorandum of understanding circulated by the federal government had never been approved by the provincial cabinet, never signed by the provincial government, and had no corresponding line item in the province’s budget for the current fiscal year. The department noted that the memorandum’s own text explicitly rules out at-source deductions from the provincial share.
The province grounded its objection in constitutional law, arguing that Article 164 does not give federal authorities power to make unilateral deductions from funds owed to a province, and that no consent had been given under that provision. Any reduction to a province’s constitutional fiscal entitlement, the department said, requires an explicit constitutional or statutory basis and cannot be carried out through an executive order or accounting instruction alone.
The letter said the issue had already been raised in a meeting chaired by the provincial finance advisor, attended by representatives of the Accountant General’s office, where officials agreed no action would proceed without Khyber Pakhtunkhwa’s concurrence. The department asked that no deduction, debit, or accounting entry tied to the 6.4 billion rupees be recorded against the province absent express approval backed by lawful authority, and asked that the federal accounts office be instructed accordingly.
Chief Minister Sohail Afridi laid out the province’s position in a statement, saying the federal government had sought additional funds from Khyber Pakhtunkhwa before the budget was finalized, as it had from other provinces. Afridi said he had attached two conditions to any such contribution: a meeting with imprisoned Pakistan Tehreek-e-Insaf leader Imran Khan, with Khan’s consent, and a guarantee that merged tribal districts receive their constitutional share under the 11th National Finance Commission award within six months, backed by the threat of an ordinance under the 7th award if that deadline passed.
Afridi said the second condition was accepted and entered into the record at a National Economic Council meeting, but the requested meeting with Khan never took place ahead of the budget. He said the provincial government has neither approved nor signed any memorandum of understanding with Islamabad on the additional funds, and that the federal grant does not appear in the province’s 2026-27 budget.
The chief minister said Khyber Pakhtunkhwa has filed a petition with the Federal Constitutional Court seeking enforcement of its rights under the National Finance Commission framework. He said the province would not yield on its constitutional and financial rights, and that the federal government cannot claim authority to unilaterally deduct funds from a province’s share based on an arrangement the provincial government never approved or signed.
Copyright © 2021 Independent Pakistan | All rights reserved
