ISLAMABAD: Pakistan’s planning ministry will propose changes to the National Finance Commission (NFC) Award — a constitutional formula that governs how tax revenues are shared between the federal government and provinces — in an effort to reward regions that manage to control population growth, Planning Minister Ahsan Iqbal said on Thursday.
The proposed reform would shift financial incentives away from population size alone and toward demographic efficiency. Pakistan, a country of over 240 million people, has its population growing at around 2 percent annually. This rate is significantly above the global average, placing Pakistan among the world’s faster-growing nations.
Under the existing NFC Award, 57.5 percent of the divisible tax pool is allocated to Pakistan’s four provinces of Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan. Of this, 82 percent is distributed based on population size, effectively rewarding provinces like Punjab and Sindh that have higher population growth.
“In the next NFC Award, the Planning Ministry will propose a revision of the resource distribution formula,” Iqbal told reporters during a briefing on Pakistan’s development budget for the upcoming fiscal year.
