provincial governments

Pakistan's unified agriculture income tax regime collected only Rs5.62bn, less than 2% of declared agricultural income, highlighting systemic failures due to political resistance and institutional weaknesses. Provincial governments, influenced by landed elites, failed to enforce the tax effectively despite IMF-backed reforms.

A World Bank report highlights that Pakistan's 18th Amendment and 7th NFC Award aimed to strengthen fiscal federalism by decentralizing powers and resources to provinces. However, implementation has been ineffective, with federal deficits, provincial inefficiency in revenue mobilization, and weak local governance undermining progress. The report emphasizes incomplete devolution, governance failures, and the need for reforms like improving provincial revenue and empowering local governments.

Provincial governments in Pakistan achieved a record surplus of Rs1,636.1 billion in 2025-26 due to increased revenue and prudent spending. However, experts highlight deeper fiscal challenges, including the need for federal-provincial fiscal reciprocity, revamping the NFC formula, and addressing bloated public sector expenses.

Prime Minister Shehbaz Sharif addressed the National Economic Council (NEC) to discuss federal and provincial development plans for the upcoming fiscal year (FY2026-27). The meeting emphasized collaboration between the Centre and provinces to address economic challenges, including rising global oil prices, while maintaining macroeconomic stability.

Argentina has passed a new bill that reduces protections for its glaciers, allowing provincial governments greater flexibility to approve mining projects in these regions. The legislation aims to ease regulatory barriers for mining activities in glacier areas.