KP rejects Centre’s proposal to deduct Rs6.4bn from federal transfers

The Khyber Pakhtunkhwa (KP) government has rejected a federal proposal to deduct Rs6.4 billion from federal transfers payable to the provinces. The Finance Ministry informed the Accountant General of Pakistan Revenues (AGPR) about the proposed at-source deduction on August 5, 2025. However, the KP Finance Department stated that the MoU circulated by the federal government for this purpose has not been approved by the provincial cabinet or signed by the provincial government.

The KP government argued that the constitutional position is clear and that Article 164 of the Constitution does not authorize unilateral deductions from funds constitutionally payable to a province. KP Chief Minister Sohail Afridi had previously stated that the federal government had demanded additional funds from the KP government, just as it had from other provinces, but that the conditions for this were not met.

Brief written by urgent.news from Dawn - Pakistan's own syndicated text. Machine-written — may contain errors; check the original before relying on it.