From July to December 2012, the federal government transferred Rs592 billion or 37.8% of the annual commitments made under the 7th National Finance Commission (NFC) Award to provinces whereas it should have been 45%. For the current fiscal year, the federal government is expected to disburse Rs1.45 trillion to the provinces as per their share in tax revenues — the provinces are entitled to 57.5% of the total tax collection, but in the first six months, Punjab received Rs278.6 billion or 39.3% of its share of Rs710.3 billion, Sindh received Rs154.1 billion or 41.2% of its share of Rs373.6 billion, Khyber-Pakhtunkhwa received Rs96.4 billion or 39.9% and Balochistan was given just Rs63.2 billion or 47.4% of its annual share of Rs133.3 billion.
During the PPP rule, the following tax breaks in the last six months affected the collections:
Withdrawal of the biggest new revenue spinner — 1% withholding tax on manufacturing — resulting in a revenue loss of Rs18 billion.
Drastic cut of federal excise duty on sugar to 0.5% aimed at benefiting the influential sugar industry owners, causing a loss of Rs8 billion to the national exchequer.
50% cut of sales tax for steel melters, causing revenue loss of nearly Rs4 billion.