DLP Report
PESHAWAR
Chief Minister Khyber Pakhtunkhwa Muhammad Sohail Afridi on Saturday rejected the Centre’s move to deduct Rs6.4 billion at source from the province’s July fiscal transfers, terming it unconstitutional and without any legal basis.
Mr Afridi said the instructions were issued on Aug 5, the same day the provincial government held a public gathering in Peshawar against the three-year imprisonment of PTI founder Imran Khan, and were made without prior consultation or consent.
“The federal government has issued instructions for an at-source deduction of Rs6.4 billion from federal fiscal transfers due to the province for July, without the consent of the provincial government and without any constitutional or legal basis,” he said in a handout issued by the Chief Minister’s Secretariat.
He said the issue concerned the constitutional and fiscal rights of KP. “Any deduction from the province’s constitutional fiscal entitlement must have a clear constitutional or legal basis and the consent of the provincial government.”
According to the CM, before the current federal budget the Centre had sought additional funding from provinces, including KP. If the Federal Board of Revenue achieved its Rs15,260 billion tax collection target, KP’s share would have been about Rs175 billion.
Mr Afridi said he had made approval conditional on two points: a meeting and approval from Imran Khan, and the release of the merged districts’ due share under the 11th National Finance Commission Award.
He added that the federal government had accepted the second condition, which was also recorded in the National Economic Council proceedings. It was further agreed that if the share was not provided within six months, the matter would be pursued under the 7th NFC.
“Since I was not allowed to meet my leader, Imran Khan, the KP government neither approved nor signed any MoU with the federal government concerning the provision of the additional amount,” he said. Consequently, the amount was not included in the provincial budget for FY2026-27.
The Finance Department, in a letter dated Aug 13 to the Accountant General KP, conveyed the province’s non-consent. Finance Adviser Muzammil Aslam also met AGKP officials and a formal letter was issued asking them to refrain from the deduction.
Mr Afridi said the provincial government had already filed a petition in the Federal Constitutional Court seeking enforcement of its rights under the NFC.
“We will make no compromise whatsoever on Khyber Pakhtunkhwa’s constitutional, fiscal and NFC-related rights,” he said, adding that the province would pursue “every available legal, constitutional and institutional avenue” to defend its share.
