Former Federal Board of Revenue chairman Shabbar Zaidi has called for ending the “supremacy of one province” to improve the National Finance Commission (NFC) award and the financial cost borne by the federal government.

“My personal view is that the NFC award has to be revised and the biggest issue is that all finance and interest costs are being borne by the Centre. This leaves the Centre bankrupt,” he said while appearing on News Insight with Amir Zia which was aired on Aaj News on Tuesday.

The NFC award is designed to allocate financial resources between the federal government and the provinces. It is based on the recommendations of the National Finance Commission.“

In the recent past, provinces have called for a revision given the security situation and climate change impact.

While speaking about it, Zaidi said: “I will share an incident on the 10th NFC, once a leader of a big institution told [former finance minister] Shaukat Tarin that ‘you compelled us to do the 10th NFC.’ Tarin replied ‘I did not compel you to do it, I did it myself’.”

The former FBR chairman reiterated that it should be adjusted. When asked why provinces were not willing to share the burden, he said: “This is impossible like the Kalabagh Dam is difficult.”

He went on to claim that “three provinces” do not believe in the federation because a “big province” has a majority in the National Assembly. They also have concerns that the Money Bill is not presented in the Senate, Zaidi said and claimed that the three provinces have a concern that maybe in future all financial issues would be taken by a province.

“This is the basic problem. If you do not resolve it, this government would not be able to operate,” he said and warned that East Pakistan was also separated because of such a situation where one province had more majority over other provinces.

“If you want the NFC award and amendment to the award, it should also entail another amendment that money bill, the taxation bill, will also go to the Senate.”

He was of the view that the FBR missing Rs100 billion or Rs120 billion in meeting the quarterly tax collection target should not be taken negatively, saying that the Rs13,000 billion target is huge.

“I think, FBR’s performance on this quarter is not bad,” he said and added that “target” was a wrong word because such an amount would not improve the country’s economy. “Pakistan will have to collect worth Rs26,000 tax for improvement.”

In response to a question, Zaidi said that it was possible because of the level of economic activity in the country. He mentioned how battery, steel, and coal were being sold without the excise duty and many retailers not paying taxes.

“If all bazaars even give 15% of their tax, matters will be resolved,” the ex-FBR chairman said and described property and gold as a “parking ground of money.”

He was of the view that the International Monetary Fund defined tax measures, not the government. “Parliament does not know about tax. It can only do constitutional amendment at 5pm, not talk about tax.”

Zaidi agreed with Finance Minister Muhammad Aurangzeb that the people needed to “change their DNA” to become habitual in paying taxes.

According to him, provinces were already under a burden as the agricultural tax and property tax were already enforced. “Bombay City’s property tax collection is more than the whole of Pakistan’s collection.” He called for a property survey.

He added that such programmes on the economy were “intellectual entertainment” for those who were aware of the situation. Zaidi stated that the finance minister should be independent from the influence of the IMF and the institutions.

He refrained from talking about Punjab’s overspending in the province while the Fund asked provinces to cut their budget.

Also, read this

A Miftah Ismail crash course on fixing Pakistan’s economy

Income tax calculator for FY 2024-25

Overseas Pakistani group offers Rs100 billion to buy PIA

When asked, Zaidi said that the youth needed intellectual, social, and political independence and lamented society in Pakistan was intolerant. “Now people fear and live in a secluded environment.”

The former FBR chief called for an education system that promotes home study and better institutions in the country. He hoped brilliant minds of Pakistan would return home.

“There was a rightist thinking and they [those who promoted it] failed after 1979. Now they are taking revenge on Pakistan. They know they cannot come [to power] by ballot box and take revenge on Pakistani people. It has destroyed Pakistan.”