ISLAMABAD: The federal government is facing difficulties in finalising the budget for the next fiscal year, and is repeatedly delaying its announcement, Khyber-Pakhtunkhwa Adviser on Finance Muzammil Aslam said on Wednesday, alleging that Islamabad was seeking additional taxes and subsidy contributions from provinces to bridge its fiscal gap.
Addressing a news conference here at KP House alongside Khyber-Pakhtunkhwa Information Minister Shafi Jan, Muzammil said postponement of the National Economic Council (NEC) meeting and changes in the budget schedule suggested that the federal government was struggling to complete its budget preparations.
He claimed that the federal government was asking provinces to allocate funds for fertiliser subsidies and had also sought additional taxation measures from provincial governments.
According to him, Khyber-Pakhtunkhwa was initially informed of a target of Rs35 billion in additional tax collection but was later formally asked by the federal government to generate Rs65 billion in extra taxes, a demand he described as surprising.
Muzammil maintained that provinces had limited options left to increase their tax revenues.
He said property tax collection in Peshawar ranked first among major cities while Karachi stood second, arguing that provincial governments had already exhausted many available taxation avenues. The Khyber-Pakhtunkhwa finance adviser also alleged that the federal government was planning to reduce electricity subsidies in the upcoming budget.
He said power sector subsidies were expected to decline from around Rs1.2 trillion in the current fiscal year to Rs830 billion in the next budget and claimed that the subsidy available to consumers using up to 200 electricity units per month could be withdrawn. He further said the federal government wanted provinces to contribute funds for fertiliser subsidies, particularly for Diammonium Phosphate (DAP), adding that provincial governments were being asked to set aside resources for the purpose.
Referring to wheat prices, Muzammil claimed that Peshawar currently had the highest wheat prices in the country and alleged that the Punjab government was creating hurdles in the supply of wheat to KP.
KP Information Minister Shafi Jan criticised the conduct of elections in Gilgit-Baltistan and claimed that his party had already secured victory there. He alleged that attempts were being made to prevent Pakistan Tehreek-e-Insaf backed candidates from contesting on a single electoral symbol.
Shafi Jan said his party would protect what he called the public mandate in Gilgit-Baltistan and would not allow a repeat of the controversies associated with the 2024 general election. He claimed that despite PTI founder Imran Khan’s incarceration, voters in GB continued to support him. The federal government had not yet responded to the allegations made by the KP leadership regarding budget preparations, taxation targets, electricity subsidies and fertiliser funding.
