What Is the National Finance Commission (NFC)?
A plain-English guide to Pakistan's National Finance Commission — what it is, how NFC distribution shares revenue between the centre and provinces, and which finance commission is going on right now.
Written & reviewed by Ahmad Hussain · June 2026
What Is the National Finance Commission?
The National Finance Commission (NFC) is a constitutional body in Pakistan responsible for deciding how the country's tax revenue is shared between the federal government and the four provinces. It is created under Article 160 of the Constitution of Pakistan, which requires the President to constitute a National Finance Commission at intervals of no more than five years.
The commission's decision is issued as the NFC Award — a formal order that sets the formula for revenue distribution between the centre and the provinces. In short, when people ask what is national finance commission, the simplest answer is: it's the body that decides who gets what share of national tax money in Pakistan.
🔍 Quick Clarification: Two Different "NFCs"
The abbreviation "NFC" is shared by two completely different things, which causes confusion:
- National Finance Commission (Pakistan) — the constitutional revenue-sharing body this guide is about. This is what most people mean when they search "national finance commission."
- National Finance Center (USA) — a payroll and HR administrative office inside the United States Department of Agriculture (USDA). It handles government staff payments, not revenue distribution. We cover this briefly later for clarity.
How the National Finance Commission Works
The National Finance Commission is a federal government body chaired by the Federal Finance Minister, and including the four provincial finance ministers plus other experts appointed by the President. Its job is to agree a formula for sharing the "federal divisible pool" — the combined revenue from taxes like income tax, sales tax, federal excise duty and customs duty.
Constituted under Article 160
The President constitutes the commission at least every five years. It brings together the federal and provincial finance ministers to negotiate revenue sharing.
Agrees a formula
The commission agrees how to split the divisible pool vertically (centre vs provinces) and horizontally (between the four provinces), using factors like population, poverty, revenue and area.
Issued as the NFC Award
The agreed formula is approved by the President as the NFC Award, which then governs NFC distribution for the next five years.
How NFC Distribution Works
NFC distribution happens in two stages. First the divisible pool is split between the centre and the provinces (the "vertical" share); then the provincial portion is divided between the four provinces (the "horizontal" share).
Under the 7th NFC Award — the one currently in force — the provinces collectively receive 57.5% of the federal divisible pool, and the federal government keeps the remaining 42.5%. The provincial share is then distributed as follows:
The horizontal formula isn't based on population alone. The 7th NFC Award introduced multiple criteria: population (82%), poverty and backwardness (10.3%), revenue collection and generation (5%), and inverse population density/area (2.7%). This was designed to give smaller and less-developed provinces like Balochistan a fairer share than population numbers alone would allow.
Which Finance Commission Is Going On Now?
A common question is which finance commission is going on currently. The answer: the 7th NFC Award, signed on 30 December 2009 and effective from 1 July 2010, is still the award in force as of 2026.
Although the Constitution expects a new award roughly every five years, successive governments have repeatedly failed to reach consensus on an 8th NFC Award. Attempts under different administrations have stalled, partly over disputes about the federal versus provincial share, the merged tribal districts of Khyber Pakhtunkhwa, and revenue projections. As a result, the 7th Award has continued well beyond its intended five-year term while negotiations for a new National Finance Commission award remain ongoing.
In total, seven NFC Awards have been announced since the first one in 1975, each meant to last about five years.
NFC Government Body vs the US National Finance Center
As an NFC government body, Pakistan's National Finance Commission is purely about fiscal federalism — sharing money between the federation and provinces. It does not run programmes itself; it sets the formula that the federal government then uses to transfer funds.
National Finance Commission (Pakistan)
A constitutional NFC government body under Article 160, chaired by the Federal Finance Minister with provincial finance ministers as members. It decides NFC distribution between the centre and the four provinces via the NFC Award.
National Finance Center (USA)
Completely separate and often confused due to the shared "NFC" abbreviation, the National Finance Center is a shared-services office within the United States Department of Agriculture (USDA). It provides payroll, HR and financial administration services to many US federal agencies. It is an administrative office, not a revenue-distribution commission.
Key Takeaways
- The National Finance Commission (NFC) is a constitutional body in Pakistan under Article 160 that shares revenue between the centre and provinces.
- NFC distribution currently gives provinces 57.5% of the divisible pool under the 7th NFC Award.
- The provincial split is Punjab 51.74%, Sindh 24.55%, Khyber Pakhtunkhwa 14.62% and Balochistan 9.09%.
- The 7th NFC Award (2009) is the one currently going on — an 8th award has not yet been agreed.
- Pakistan's NFC government body should not be confused with the US National Finance Center, a USDA payroll office.
For the official constitutional text and award documents, see the Ministry of Finance, Government of Pakistan.
National Finance Commission — Frequently Asked Questions
What is the National Finance Commission?
The National Finance Commission (NFC) is a constitutional body in Pakistan, set up under Article 160 of the Constitution, that decides how national revenue is shared between the federal government and the four provinces. Its decision is issued as the NFC Award, which sets the formula for NFC distribution for a five-year period.
How does NFC distribution work between the centre and provinces?
Under the 7th NFC Award, the provinces receive 57.5% of the federal divisible pool and the centre keeps the rest. That provincial share is then divided between the four provinces: Punjab 51.74%, Sindh 24.55%, Khyber Pakhtunkhwa 14.62% and Balochistan 9.09%. The formula uses factors such as population, poverty, revenue generation and area.
Which finance commission is going on now?
The 7th NFC Award, signed in December 2009 and effective from July 2010, is still the one in force. Successive governments have failed to finalise an 8th NFC Award, so as of 2026 the 7th Award continues to govern NFC distribution while talks on a new award are ongoing.
What is the NFC Award?
The NFC Award is the formal order, approved by the President of Pakistan on the recommendation of the National Finance Commission, that fixes how revenues are distributed between the federation and the provinces. Seven NFC Awards have been announced since 1975, each meant to last about five years.
Is the NFC the same as the US National Finance Center?
No. The abbreviation "NFC" is shared by two different things. Pakistan's National Finance Commission is a constitutional revenue-sharing body. The US National Finance Center is an administrative payroll and HR office within the United States Department of Agriculture (USDA) — it is not a revenue-distribution commission.
Which government body runs the NFC?
The NFC is a federal government body chaired by the Federal Finance Minister and including the provincial finance ministers plus appointed experts. It is constituted by the President at intervals of no more than five years under Article 160 of Pakistan's Constitution.
This guide explains the National Finance Commission for general educational purposes and reflects publicly available information as of 2026. Figures such as the NFC Award shares are based on the 7th NFC Award and official sources. For authoritative and up-to-date details, refer to the Ministry of Finance, Government of Pakistan.