The federal government is expected to discuss with other political parties key legislative and fiscal measures ahead of the upcoming federal budget, with possible changes to the treatment of customs duty under the National Finance Commission (NFC) Award, top sources informed ProPakistani.
Policymakers are considering removing customs duty from the NFC divisible pool and allowing it to be treated as a federal revenue source rather than part of national tax receipts shared with provinces.
Under the proposal, customs duty collections would remain with the federal government, which argues that the revenue should be used primarily for federal obligations, including debt servicing.
Despite the potential change, sources said the provinces’ overall share under the NFC Award would not be reduced and would remain at 57.5 percent.
Officials are considering allocating around Rs. 1.7 trillion in customs duty revenue to the federal government in the next fiscal year to help meet debt repayment requirements.
The discussions come due to pressure from the International Monetary Fund (IMF), which has asked provinces to generate a combined budget surplus of Rs. 2 trillion.
Sources added that the federal government is expected to take other political parties into confidence on the proposed legal and fiscal changes, particularly given everyone’s role in governing Sindh and its participation in the coalition framework.
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