Article: 160 National Finance Commission

160.  National Finance Commission.—(1) Within six months of the commencing day and thereafter at intervals  not exceeding five years,  the President  shall constitute a National Finance Commission consisting of the Minister of Finance of the Federal Government, the Ministers of Finance of the Provincial Governments, and such other persons as may be appointed by the President after consultation with the Governors of the Provinces.

(2)  It shall be the duty of the National Finance Commission to make recommendations to the President as to–

(a)  the distribution between the Federation and the Provinces of the net proceeds of the taxes mentioned in clause (3);

(b)  the making of grants-in-aid by the Federal Government  to the  Provincial Governments;

(c)  the exercise by the Federal Government and the Provincial Governments of the borrowing powers conferred by the Constitution; and

(d)  any other matter relating to finance referred to the Commission by the President.

(3)  The taxes referred to in paragraph (a) of clause (2) are the following taxes raised under the authority of  1[Majlis-e-Shoora (Parliament)], namely:–

(i)  taxes on income, including corporation tax, but not  including taxes on income consisting of remuneration paid out of the Federal Consolidated Fund;

2[(ii)  taxes on the sales and purchases of goods imported, exported,  produced, manufactured or consumed;]

(iii)  export duties on cotton, and such other export duties as may be specified by the President;

(iv)  such duties of excise as may be specified by the President; and

(v)  such other taxes as may be specified by the President.

3[(3A) The share of the Provinces in each Award of National Finance Commission shall not be less than the share given to the Provinces in the previous Award.

(3B) The Federal Finance Minister and Provincial Finance Ministers shall monitor the implementation of the Award biannually and lay their reports before both Houses of Majlis-e­-Shoora (Parliament) and the Provincial Assemblies.]

(4)  As soon as may be after receiving the recommendations of the National Finance Commission, the president shall, by Order, specify, in accordance with the recommendations of the Commission under paragraph (a) of clause (2), the share of  the  net proceeds of  the   taxes  mentioned  in  clause (3)  which  is  to  be  allocated to each Province, and that share  shall be paid to the Government of the Province concerned, and, notwithstanding the provision of Article 78 shall not form part of the Federal  Consolidated Fund.

(5)  The recommendations  of the National Finance Commission, together with an explanatory memorandum  as to the action taken thereon, shall be laid before both Houses and the Provincial Assemblies.

(6)  At any time before an Order under clause (4)  is made, the President may,  by Order, make such amendments  or modifications  in the law relating to the distribution of revenues between the Federal  Government and the Provincial Governments as he may deem necessary or expedient.

(7)  The President may, by  Order, make grants-in-aid of the revenues of the Provinces in need of assistance and such grants shall be charged upon the Federal Consolidated Fund.



1.  See Footnote 2 on page 4.

2.  Section 3 of the Constitution (Fifth Amendment) Act, 1976 (62 of 1976), substituted paragraph (ii) of clause 3 of Art. 160, in its present form, (w.e.f September 13, 1976), in place of the said paragraph as adopted in 1973, that read :

” (ii) taxes on sales and purchase”.

3. Section 59 of the Constitution (Eighteenth Amendment) Act, 2010 (10 of 2010), inserted the said new clauses (3A) and (3B), in their present form, after clause (3) of Art. 160, (w.e.f. April 19, 2010).

Comparative Table of Article 160 of the Constitution of Pakistan, 1973 :
Constitution of Pakistan 1962 :
Constitution of Pakistan 1956 :
Constitution of India 1950:
Government of India Act 1935:

Leading & Latest Cases on Article 160 of the Constitution of Pakistan, 1973 :


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