PESHAWAR, Aug 15 (Alliance News): The Khyber Pakhtunkhwa government has rejected a proposed Rs6.4 billion deduction from its federal financial transfers, with Chief Minister Sohail Afridi terming the move a violation of the province’s constitutional and financial rights.
In a statement, Afridi said the federal government had sought an additional amount from KP before the approval of the 2026-27 federal budget, but the release of the provision was made conditional on a meeting with incarcerated PTI founder Imran Khan and his approval.
The chief minister said the provincial government did not sign any memorandum of understanding regarding the proposed deduction because he was not allowed to meet Imran Khan.
Afridi said that if the Federal Board of Revenue (FBR) achieved its Rs15,260 billion revenue target, Khyber Pakhtunkhwa’s share would amount to around Rs175 billion.
The chief minister also referred to an arrangement discussed before the passage of the federal budget under which the provinces agreed to provide a grant to the federal government for defence requirements and to create a financial buffer against the second- and third-order impacts of the ongoing Gulf region conflict.
Finance Minister Muhammad Aurangzeb had said the arrangement with the provinces would remain in place for three years and was separate from the National Finance Commission (NFC).
Afridi said another condition related to providing the merged districts of Khyber Pakhtunkhwa their rightful share under the 11th NFC.
According to the chief minister, the federal government accepted the condition and incorporated it into the proceedings of the National Economic Council (NEC).
He said it was also agreed that if the merged districts did not receive their due share within six months, a summary would be prepared and an ordinance issued under the 7th NFC.
Afridi maintained that the additional federal grant was not included in KP’s provincial budget for the fiscal year 2026-27.
He said the Ministry of Finance proposed on August 5 that Rs6.4 billion owed to Khyber Pakhtunkhwa be deducted directly.
“The Khyber Pakhtunkhwa government neither approved nor agreed to the proposed Rs6.4 billion deduction,” he said, adding that the provincial Finance Department formally conveyed its opposition through a letter dated August 13.
The chief minister said the matter was not merely a political disagreement but involved the province’s constitutional and financial rights.
He said KP Finance Adviser Muzammil Aslam immediately held consultations with relevant officials of the Accountant General Khyber Pakhtunkhwa, following which written instructions were issued against making any deduction without the provincial government’s consent.
The Accountant General Pakistan Revenues was also instructed not to record or implement any transaction without explicit approval from the provincial government, Afridi said.
He argued that Article 164 of the Constitution did not empower the federal government to unilaterally deduct amounts owed to the province.
According to Afridi, any such deduction must have a clear constitutional or legal basis and cannot be made without the province’s consent.
The chief minister said the KP government had already approached the Federal Constitutional Court through a petition seeking protection of its constitutional rights under the NFC framework.
He vowed that the provincial government would pursue every available legal and constitutional avenue to protect its financial share.
“The provincial government will not compromise on its NFC rights,” Afridi said.
The dispute adds to ongoing tensions between the federal and Khyber Pakhtunkhwa governments over financial transfers, the distribution of resources and the constitutional entitlements of the province, particularly those relating to the merged tribal districts.
