Punjab to receive the largest allocation as higher federal tax revenues boost NFC transfers to all four provinces
ISLAMABAD: Pakistan’s four provinces are set to receive a record Rs8.63 trillion from the federal divisible tax pool during FY2026-27, reflecting higher revenue projections and increased fiscal transfers under the National Finance Commission (NFC) Award.
According to the Federal Budget 2026-27 documents, the provincial share in divisible taxes has increased from Rs7.40 trillion in the previous fiscal year, representing a substantial rise in transfers to provincial governments.
The divisible pool comprises collections from major federal taxes, including income tax, sales tax (excluding General Sales Tax on services), customs duties, federal excise duty (FED) and capital value tax (CVT).
Provincial share by tax category
The estimated provincial allocation from each tax category during FY2026-27 is:
• Income tax: Rs4.25 trillion
• Sales tax (excluding GST on services): Rs2.82 trillion
• Customs duties: Rs946.78 billion
• Federal Excise Duty (net of gas): Rs611.70 billion
• Capital Value Tax: Rs15.24 billion
The higher allocations reflect the federal government’s ambitious tax collection targets for the fiscal year, which are expected to generate greater resources for distribution under the NFC formula.
Punjab to receive the largest allocation
Punjab will remain the largest beneficiary of the divisible tax pool, with an estimated allocation of Rs4.39 trillion during FY2026-27.
The province’s share includes:
• Income tax: Rs2.16 trillion
• Sales tax: Rs1.43 trillion
• Customs duties: Rs481.41 billion
• Federal Excise Duty: Rs311.00 billion
• Capital Value Tax: Rs7.75 billion
Sindh’s share exceeds Rs2 trillion
Sindh is projected to receive Rs2.08 trillion from the divisible tax pool.
Its allocation comprises:
• Income tax: Rs1.02 trillion
• Sales tax: Rs679.00 billion
• Customs duties: Rs228.42 billion
• Federal Excise Duty: Rs147.58 billion
• Capital Value Tax: Rs3.68 billion
Khyber Pakhtunkhwa allocated Rs1.39 trillion
Khyber Pakhtunkhwa has been allocated approximately Rs1.39 trillion under the NFC framework.
The provincial distribution includes:
• Income tax: Rs683.42 billion
• Sales tax: Rs453.06 billion
• Customs duties: Rs152.37 billion
• Federal Excise Duty: Rs98.45 billion
• Capital Value Tax: Rs2.45 billion
Balochistan to receive Rs771 billion
Balochistan is expected to receive Rs771.39 billion from the divisible tax pool during FY2026-27.
The allocation comprises:
• Income tax: Rs379.34 billion
• Sales tax: Rs251.47 billion
• Customs duties: Rs84.58 billion
• Federal Excise Duty: Rs54.64 billion
• Capital Value Tax: Rs1.36 billion
Higher transfers to strengthen provincial finances
The record transfers are expected to strengthen the fiscal position of provincial governments and provide additional resources for spending on key sectors, including healthcare, education, infrastructure and public services.
The increased allocations also underscore the federal government’s expectation of stronger tax revenues in FY2026-27, enabling larger fiscal transfers under the NFC Award and supporting greater development spending across Pakistan’s four provinces.