President Zardari Forms 11th National Finance Commission for Revenue Distribution
ISLAMABAD – August 22, 2025 – President Asif Ali Zardari on Friday announced the constitution of the 11th National Finance Commission (NFC) to determine a new revenue-sharing formula between the federal government and the provinces.
According to a notification from the Finance Division, Finance Minister Muhammad Aurangzeb will chair the commission, while the four provincial finance ministers will serve as official members.
In addition, the commission includes:
Nasir Mahmood Khosa, former senior bureaucrat, representing Punjab
Asad Sayeed, economist and researcher, representing Sindh
Dr. Musharraf Rasool Cyan, former civil servant, representing Khyber Pakhtunkhwa
Farmanullah, representing Balochistan
NFC Mandate
The newly formed NFC is tasked with advising the president on how to distribute the net proceeds of taxes listed in Article 160(3) of the Constitution. These include:
Income taxes (including corporate tax, excluding salaries paid from the Federal Consolidated Fund)
Sales tax on goods produced, imported, or consumed
Export duties on cotton and other specified items
Excise duties and other levies determined by the president
The commission will also present recommendations regarding:
Grants-in-aid from the federal government to the provinces
Borrowing powers of both the federation and the provinces
Cost-sharing mechanisms for provincial subjects, trans-provincial projects, and national-level development initiatives
Any additional financial matters referred by the president
Background and Challenges
The 10th NFC Award expired on July 21, 2025, leaving revenue transfers in a transitional phase. For nearly 15 years, the 7th NFC Award (2009) has remained in force—well beyond its five-year mandate—because of continued disagreements between the Centre and provinces over revising the distribution formula.
Policymakers and economists have long argued that the federal government’s fiscal position needs strengthening, while provincial leaders insist on protecting their constitutionally guaranteed shares. The 18th Constitutional Amendment ensures that no province can receive less than what it was allocated under the previous award.
Outlook
The establishment of the 11th NFC marks a crucial step in addressing Pakistan’s long-standing revenue-sharing disputes. The commission’s recommendations are expected to shape the future of fiscal federalism, determining how national resources will be distributed to balance federal responsibilities with provincial autonomy.