Pakistan PM forms committee to review World Bank’s fiscal federalism suggestions
Pakistan's Prime Minister Shehbaz Sharif has formed a committee to review World Bank recommendations regarding fiscal federalism. The initiative aims to address tax fragmentation and clarify the functional mandates of local governments within the country's constitutional framework.
Why it matters
Reforming fiscal federalism is critical for Pakistan's economic stability and the efficient distribution of tax revenues between federal and provincial governments.
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ISLAMABAD: Prime Minister Shehbaz Sharif on Friday directed the formation of a high-level committee to review the World Bank’s recommendations on strengthening fiscal federalism in Pakistan, his office said in a statement, after a delegation led by its Country Director Bolormaa Amgaabazar met him to discuss revenue generation and federal-provincial fiscal relations. </p>
Fiscal federalism refers to the distribution of taxation and spending powers across levels of government, usually federal, provincial and local. The National Finance Commission (NFC) Award in Pakistan determines how tax revenues collected by the federal government are distributed among Pakistan’s four provinces. <br />
The World Bank released its report titled “Strengthening Fiscal Federalism in Pakistan” in June in which it pointed out that Pakistan’s tax system was fragmented, and local governments lack clearly defined or adequately resourced functional mandates. </p>
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