National Finance Commission (NFC) Award

 According to article 161 of 1973 constitution of Pakistan, it is mendatory to review the formula, dividing the federal tax collection. It was made mandatory in the constitution to review the previous NFC award and make the new one evey five years. The first NFC award was presented in 1974, under Zulfikar Ali Bhutto, where the tax was divided between federation and provinces on a fixed 20:80 ratio. The criteria of the division was mere the population percentage of each province. Thus, Punjab received the highest share.

In 1979, It was presented, General under Zia ul Haq, by finance minister Ghulam Ishaq Khan but consensus couldn't be made among the provinces. Third one was presented in 1985. The fourth NFC award was presented in a democratic government of Nawaz Sharif in 1990 and it was implemented in 1991. The tax amount including income tax, import and export duties were divisible among the provinces but excise duties were not included.

1996, it was presented by then caretaker prime minister, it included the excise duties among the divisible amount. In 2006, under general Pervaiz musharraf, sixth nfc award was presented. It also included the natural resources royalties in the divisible amount. The consensus couldn't be made on this sixth NFC award.


In 2009, seventh NFC award was presented and was implemented in 2010. It was a successful event combining the 18th constitutional amendment. The federal health ministry was abolished. The education department and local governments were transferred to the provinces. Also, the poverty, backwardness and  tax collection, population density, population inversiveness were included in the criteria alongside population percentage having the largest contribution (82%).


The consensus couldn't be made on 8th, 9th and 10th NFC award and the 7th award was kept implied. President of Pakistan formed the commission for the 11th award in 2025, the team including federal finance minister and provincial finance ministers.


The federation is under heavy debt, deficits and repayments of loans and thus it intends to get back its some powers and seeks more share of the revenue. One such move was to impose non-divisble petroleum levy.

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