Khyber Pakhtunkhwa Chief Minister Sohail Afridi has said that the federal government has no authority to deduct Rs6.4 billion from the province’s share. He said the provincial government neither approved nor agreed to the proposed deduction.

On August 5, the federal Ministry of Finance had proposed a direct deduction of Rs6.4 billion from the amount due to Khyber Pakhtunkhwa in the July federal financial transfer.

According to Sohail Afridi, the KP Finance Department made the provincial government’s position clear in a letter dated August 13, rejecting the proposed deduction. Written instructions have been issued to the relevant officials of the Accountant General Khyber Pakhtunkhwa not to deduct the Rs6.4 billion or take any related action without the provincial government’s consent.

The Accountant General Pakistan Revenues has also been instructed not to record or implement any transaction related to the proposed deduction without the explicit consent of the provincial government.

The chief minister said that before the budget, the federal government had demanded additional funds from Khyber Pakhtunkhwa, as it had from other provinces. If the Federal Board of Revenue (FBR) achieved its target of Rs15,260 billion, Khyber Pakhtunkhwa’s share would have amounted to approximately Rs175 billion.

According to him, the provision of the additional funds was made conditional on a meeting with PTI founder Imran Khan and his approval. Another condition set by the provincial government was that the merged districts should receive their constitutional and legitimate share under the 11th National Finance Commission (NFC).

Sohail Afridi said the federal government had agreed to the condition of providing the merged districts their legitimate share within six months and had made it part of the NFC proceedings. It was also decided that if the legitimate share was not provided within six months, a summary and ordinance would be brought under the 7th NFC.

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As a meeting with PTI founder Imran Khan was not arranged, Khyber Pakhtunkhwa neither approved nor signed the memorandum of understanding (MoU) regarding the additional funds.

Under the same principle, the additional federal grant was not included in the provincial budget for fiscal year 2026-27. The MoU circulated by the federal government was neither approved by the provincial cabinet nor signed by the provincial government, and no funds were allocated for such an arrangement in the budget.

The chief minister said the issue was not merely a political disagreement but a matter of Khyber Pakhtunkhwa’s constitutional and financial rights. According to the Finance Department, Article 164 of the Constitution does not give the federal government the authority to unilaterally deduct amounts owed to the province.

Any deduction from the province’s financial share requires a clear constitutional or legal basis as well as the consent of the provincial government, the department said.

Sohail Afridi said that on his instructions, Adviser to the Chief Minister on Finance Muzzammil Aslam immediately met relevant officials of the Accountant General Khyber Pakhtunkhwa, after which written instructions were issued not to deduct the Rs6.4 billion without the provincial government’s consent.

The Khyber Pakhtunkhwa government has already filed a petition before the Federal Constitutional Court seeking its constitutional right under the National Finance Commission.

The chief minister said the KP government would not compromise on its constitutional, financial and NFC rights. He said the federal government had no authority to deduct money from the province’s share on the basis of an MoU that had neither been approved nor signed by the provincial government.

Sohail Afridi said Khyber Pakhtunkhwa would pursue every legal, constitutional and institutional avenue to protect its constitutional rights and would defend every single rupee of the province’s financial share.