Federal govt to bear all war expenses

ISLAMABAD: Federal Finance Minister Shaukat Tarin has said that the federal government will bear all expenses incurred by any province in the war on terror. Tarin said that as a gesture of support, all the provinces and the federation have agreed to earmark one per cent of the federal divisible pool for NWFP, adding that the federal government will bear all the expenditures incurred in the anti-terror war.
The finance minister came down hard on the federal government’s spending habits. He advised the federal government to cut down its expenses in order to be able to give the provinces the pledged share under NFC.
Tarin said that the federal government must reduce the number of ministries to give an increased share to the provinces under the NFC award.
He said the government will be giving more to the provinces from the federal divisible pool and therefore the provinces will be responsible for health, education, water services and sanitation. This means that these ministries in the federal government become redundant.
He said that if the size of the government is not reduced and austerity measures not implemented then the government would not be able to give the promised share to the provinces.
Tarin said that a consensus on the NFC award would prove to be a good omen for provincial harmony.
The provinces have also been authorized to collect Sales Tax on services, said Tarin, adding that tax on agriculture income and capital value tax is already a provincial subject.
He asked the provinces to strictly impose the tax on agriculture income.
‘Agriculture is about 22 per cent of GDP. If we don’t tax them because the agriculturalists are powerful people sitting in parliament, then it would be unfair with other taxpayers,’ said Tarin.
He said that the federal government had fulfilled its commitment of making provinces financially autonomous but now it was up to the provincial governments to build up their revenue generation capacities and to spend wisely