Public Finance Management Act, 2019

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THE PUBLIC FINANCE MANAGEMENT ACT, 2019 
 
 
 
 
CONTENTS 
 
CHAPTER I 
PRELIMINARY 
1. Short title, application and commencement 
2. Definitions 
CHAPTER II 
BUDGET MANAGEMENT 
BUDGET PREPARATION AND PRESENTATION 
3. Budget strategy paper 
4. Annual Budget Statement 
5. Plan based Government’s expenditure 
6. Grant-in-aid 
7. Receipt of grants by the Government 
8. Tax expenditure 
9. Performance based budget 
10. Changes in schedule of authorized expenditure 
11. Re-appropriation of funds 
12. Surrender of savings 
CHAPTER III 
DEVELOPMENT PROJECTS AND 
MAINTENANCE AND USE OF PUBLIC ASSETS 
13. Classification of development projects 
14. Preparation of development projects 
15. Quality assurance 
16. Technical approval 
17. Inclusion of development projects in demands for grants 
18. Monitoring and evaluation of development projects 
19. Budgetary provision for maintenance of assets 
20. Utilization of public assets 
 
 
 
 
 

   
 
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CHAPTER IV 
CONTROL OF PUBLIC FINANCE 
CONSOLIDATED FUND AND PUBLIC ACCOUNT 
21. Federal Consolidated Fund 
22. Custody of the Federal Consolidated Fund and Public Account of the Federation 
23. Expenditure from Federal Consolidated Fund and Public Account 
24. Withholding of authorized appropriations 
25. Excess expenditure 
26. Commitment control system 
27. Delegation of financial powers 
28. Chief finance and accounts officer 
29. Chief internal auditor 
CHAPTER V 
TREASURY MANAGEMENT 
30. Cash management 
31. Government banking arrangements 
CHAPTER VI 
SPECIAL PURPOSE FUNDS 
32. Special purpose funds 
CHAPTER VII 
ACCOUNTING AND REPORTING 
33. Controller General of Accounts 
34. Mid-year reporting of budget developments 
35. Year-end government performance monitoring report 
CHAPTER VIII 
PUBLIC ENTITIES 
36. Public entities 
37. Self-generated revenues 
38. Preparation of accounts 
39. Audit 
40. Dissolution of public entity 
CHAPTER VIIIA 
NON TAX REVENUE 
40A. Policy and administration 
40B. Levy and collection 
40C. Deposit in Federal Consolidated Fund 
40D. Late payment surcharge 
40E. Recovery of non tax revenue by Commissioner (Inland Revenue) 
CHAPTER IX 
REMOVAL OF DIFFICULTY AND POWER TO MAKE RULES 
 
41. Removal of difficulty 
42. Power to make rules 
43. Budget manual 
44. Implementation and improvement 
45. Overriding effect  
   
 
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THE PUBLIC FINANCE MANAGEMENT ACT, 2019     
 
 [30th June, 2019] 
 
 AN   
1ACT 
 
to strengthen management of public finances with the view to improving definition and implementation 
of fiscal policy for better macroeconomic management, to clarify institutional responsibilities related 
to financial management, and to strengthen budgetary management; 
 
WHEREAS matters mentioned above are pivotal for reducing public debt and management of 
public finances; 
 
AND WHEREAS as defined under Article 79 of the Constitution of the Islamic Republic of 
Pakistan, it is expedient to provide for regulating the custody of the Federal Consolidated Fund, the 
payment of moneys into that Fund, the withdrawal of moneys therefrom, the custody of other moneys 
received by or on behalf of the Federal Government, their payment into, and withdrawal from, the 
Public Account of the Federation, and all matters connected with or ancillary thereto; 
 
AND WHEREAS to give elaborate mechanism of public finance management as envisaged in 
Articles 78 to 88 2[* * *] and 160 to 171 of the Constitution and to guide budgetary management 
processes, financial and fiscal controls, cash and banking arrangements, and financial oversight of 
public entities; 
 
It is hereby enacted as follows:— 
 
CHAPTER I 
PRELIMINARY 
1. Short title, application and commencement.—(1) This Act may be called the Public 
Finance Management Act, 2019. 
 
(2) It shall apply to all matters of the Federal Consolidated Fund and Public Account of the 
Federation and all other matters of the Federal Government connected with or ancillary thereto. 
 
(3) It shall come into force at once. 
 
2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— 
 
(a)  “appropriation” means the assignment to meet specified expenditure of funds at 
the disposal of the assigning authority; 
 
(b)  “Auditor-General” means Auditor-General of Pakistan appointed under Article 
168 of the Constitution; 
 
(c)  “authorization of expenditure”  means payments and withdrawals from the 
Federal Consolidated Fund and Public Account of the Federation against 
approved budgetary provisions deemed to be duly authorized unless it is 
specified in the schedule of authorized expenditure; 
 
 
 
 
 
1This Act was enacted vide section 18 of the Finance Act, 2019 (Act No. V of 2019). 
2Omitted by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
  
   
 
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(d)  “bank” means the State Bank of Pakistan or any office or agency of the State 
Bank of Pakistan and includes any bank acting as an agent of the State Bank of 
Pakistan in accordance with the provisions of the State Bank of Pakistan Act, 
1956 (XXXIII of 1956); 
 
(e)  “commitment” means an obligation to make a future payment, the funds for 
which are reserved against the allocated budget of an entity; 
 
(f)  “constitution” means the Constitution of the Islamic Republic of Pakistan; 
   
(g)  “Controller General of Accounts” means the person appointed under the 
Controller General of Accounts (Appointment, Functions and Powers) 
Ordinance, 2001 (XXIV of 2001); 
 
(h)  “contingent liability” means a financial liability that may arise or come into 
being if one or more events occur;    
(i)  “Federal Consolidated Fund” means the Federal Consolidated Fund of the 
Government of Pakistan created under Article 78 of the Constitution; 
 
(j)  “financial propriety” means the compliance of law, rules, regulations, 
maintaining high standard of prudence, vigilance, due diligence and ensuring 
value for money while incurring expenditure and collecting government 
receipts; 
 
(k)  “financial year” means the financial year as defined under Article 260 of the 
constitution; 
 
(l)  “Government” means the Federal Government; 
 
(m)  “medium-term” means budgetary estimates for a rolling three-year budgetary 
horizon. This includes current estimates, which are to be appropriated by 
Parliament, and two additional or ‟outer” years’ estimates; 
 
1[(ma) “non-tax revenue” means revenues received by the Government in terms of 
clause (1) of Article 78 of the Constitution, and the recurring income of the 
Government from investments and provision of services but does not include 
those mentioned in clause (3) of Article 160 of the Constitution;] 
 
(n)  “outcomes” means the effects of outputs on targeted audience; 
 
(o)  “outputs” means service delivered; 
 
(p)  “prescribed” means prescribed by rules; 
 
(q)  “principal accounting officer” means the secretary of a Division or any official 
notified as principal accounting officer, responsible for exercising financial 
propriety in management of public funds and having accountability to 
Parliament for the economic, efficient and effective use of resources. 
 
             Explanation.—The term “secretary” shall include the secretary general, 
principal secretary, secretary or acting secretary to the Government of Pakistan 
in charge of a division and where there is no secretary, the additional secretary 
or joint secretary in charge of a division; 
 
(r)  “Public Account” means the Public Account of the Federation as defined under 
Article 78(2) of the Constitution; 
 
 
1Ins. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
   
 
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(s)  “public moneys” mean the moneys forming part of the Federal Consolidated 
Fund and the Public Account of the Federation; 
 
(t)  “public servant” means a public servant within the meaning of section 21 of the 
Pakistan Penal Code (Act XLV of 1860); 
 
(u)  “re-appropriation” means transfer of funds from one head of account of 
appropriation to another such head of account ¹[within one demand for grant]; 
 
1[Provided that no re-appropriation shall be made between funds 
authorized for expenditure charged upon the Federal Consolidated Fund and 
other expenditure.] 
 
1[(ua) “revenue collection office” means a ministry, division or its attached 
department or subordinate office responsible for collection, monitoring and 
reporting of non-tax revenue;] 
 
(v)  “supplementary grant” means budget grant within the meaning of Article 84 of 
the Constitution; 
 
2[(w)  “technical supplementary grant” means appropriation or authorization, as the 
case may be, of additional funds to a demand for grant against— 
   
 (i)  surrender from another demand for grant; or  
(ii)  anticipated saving received by the Finance Division; or 
(iii)  unbudgeted revenue receipt deposited by Provinces or Entities in 
Federal Consolidated Fund for a specific purpose; or 
 
(iv)  unbudgeted foreign grants received or deposited by foreign governments 
or international donors in Federal Consolidated Fund for a specific 
purpose.] 
 
(x)  “tax expenditure” means the revenue which Government foregoes through the 
provisions of tax laws that allows deductions, exclusions or exceptions from the 
taxpayer’s taxable expenditure income or investment, deferral of a tax liability 
or preferential tax rates; 
 
(y)  “treasury single account” means a banking arrangement for the consolidation of 
government financial resources in one bank account or multiple bank accounts 
linked to one main account through which the government transacts all its 
receipts and payments; and 
 
(z)  “voted expenditure” means expenditure other than the charged expenditure 
specified in the  annual budget statement referred to in Article 82(2) of the 
Constitution. 
 
   
 
 
 
 
1Ins. and added by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
2Subs. by the Finance Act, 2024 (Act No. X of 2024), s. 11. 
   
 
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CHAPTER II 
BUDGET MANAGEMENT 
BUDGET PREPARATION AND PRESENTATION 
 
3. Budget strategy paper.—(l) The Federal Government shall approve the budget strategy 
paper containing quantified macroeconomic and fiscal projections for the medium-term by 1[tenth of 
May] of each year. It shall be published as well as placed on the Finance Division’s official website. 
The paper shall indicate strategic priorities of the Government revenue and spending policies and 
specify indicative levels of spending in various Ministries and Divisions. Upon approval of the paper, 
the Finance Division shall issue indicative budget ceilings to Ministries and Divisions. 
 
(2) The Minister for Finance shall 2[also presented discuss the budget strategy paper with the 
Standing Committees] for Finance and Revenue in the Senate and the National Assembly. 
 
(3) The Federal Government may extend the deadline mentioned in sub-section (1) in case of 
extreme requirement. 
 
4. Annual Budget Statement.- (1) The Federal Government shall, in respect of every financial 
year, cause to be laid before the National Assembly, Annual Budget Statement consistent with Articles 
80 and 81 of the Constitution including a statement of the purpose and estimates divided into 2[major 
objects for each demand for grant]. 
 
(2) Each Demand for grant may indicate budget estimates of the ensuing year, initial budget 
estimates and revised estimates of outgoing year and provisional actual expenditure of year prior to 
outgoing year. 
 
(3) The Annual Budget Statement shall also contain-  
 
(a)  statement of contingent liabilities of the Federal Government; and 
 
(b)  statement of fiscal risks. 
 
2[5. Plan based Government’s expenditure.—All government expenditures, whether from a 
recurrent or development demand for grant, shall be based on well-defined plans and the strategic 
priorities approved in budget strategy paper as per section 3.] 
 
6. Grant-in-aid.—The Federal Government may approve grant-in-aid for individual, public 
and private institutions, local bodies and other non-political institutions and associations as it may 
consider appropriate in the manner as may be prescribed. 
 
7. Receipt of grants by the Government.—(1) Grants made to the Government by a foreign 
Government or by any other person shall be received by the Economic Affairs Division and Finance 
Division on behalf of the Government. 
 
(2) The Finance Division shall, in collaboration with representatives of donors, reach 
agreements and issue instructions concerning the management of such grants. 
 
 
 
 
 
1Subs. by the Finance Act, 2023 (Act No. XXXIV of 2023), s. 9. 
2Subs. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
 
   
 
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8. Tax expenditure.—The Federal Government shall, in respect of every financial year cause 
to be laid before the National Assembly, Finance Bill consistent with Article 73 of the Constitution 
including a statement of estimated tax expenditure of the Federal Government. 
 
9. Performance based budget.—(1) The Federal Government shall, in respect of every 
financial year, cause to be laid before the National Assembly a medium-term performance based 
budget 1[report] along with the Annual Budget Statement. 
 
(2) For each principal accounting officer, the medium-term performance based budget 1[report] 
may include policy and goals, past and future expenditure, outputs and outcomes and related 
performance indicators and targets. 
 
10. Changes in schedule of authorized expenditure.- If in respect of any financial year it is 
found— 
(a)  that the amount authorized to be expended for a particular service for the current 
financial year is insufficient, or that a need has arisen for expenditure upon some 
new service not included in the Annual Budget Statement for that year; or 
 
(b)  that any money has been spent on any service during a financial year in excess 
of the amount granted for that service for that year,  
 
the Federal Government shall have power, as prescribed, to authorize expenditure from the Federal 
Consolidated Fund, whether the expenditure is charged by the Constitution upon that Fund or not, and 
shall cause to be laid before the National Assembly Supplementary Budget Statement or, as the case 
may be, an Excess Budget Statement, setting out the amount of that expenditure, and the provisions of 
Articles 80 to 83 shall apply to those statements as they apply to the Annual Budget Statement. 
 
11. Re-appropriation of funds.—Principal accounting officers may sanction, 1[by thirty-first 
day of May each] year, re-appropriation of funds from one expenditure item to another within a budget 
grant in the manner as may be prescribed 1[:] 
 
1[Provided that in an exceptional case of exigency, the Finance Division may extend the 
prescribed time limit before the close of the financial year.] 
 
12. Surrender of savings.—(1) All Ministries and Divisions, their attached departments and 
sub-ordinate offices and autonomous organizations shall surrender to the Finance Division 1[by thirty-
first day of May each year], all anticipated savings in the grants or assignment accounts or grant-in-
aid controlled by them 1[:] 
 
1[Provided that in an exceptional case of exigency, the Finance Division may extend the 
prescribed time limit before the close of the financial year.] 
 
(2) The Finance Division shall communicate the acceptance of such surrenders before close of 
the financial year and where requirement is justified, shall provide for equivalent amount in the next 
financial year budget. 
 
 
 
 
 
1Ins., subs. and added by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
 
   
 
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CHAPTER III 
DEVELOPMENT PROJECTS AND MAINTENANCE AND USE OF PUBLIC ASSETS 
 
 
13. Classification of development projects.—Projects defined in public sector development 
programme shall be classified as:— 
 
(a)  core projects in national infrastructure requiring complex planning, design and 
implementation procedures. The Planning Commission shall designate projects 
as such in accordance with the criteria notified in official Gazette; and 
 
(b)  sectoral projects, projects undertaken by specific sectors, Ministries and 
Divisions which are required to enhance the development of that sector or 
Ministry or Division and do not fall under the above category of core projects. 
 
14. Preparation of development projects.—(1) All development projects shall be prepared 
in conformity with procedures, processes and templates defined by the Planning Commission. 
 
(2) Cost and benefit analysis and risk assessment of all development project proposals, in 
excess of a threshold size prescribed by the Planning Commission, shall be undertaken. 
 
15. Quality assurance.—Development project proposals which exceed in their total cost 
thresholds defined by the Planning Commission shall be subject to quality assurance. Such quality 
assurance shall be undertaken by an individual/body which is independent of the 
sector/Ministry/Division that has initiated the preparation of the development project proposal. 
 
16. Technical approval.—(1) All development project proposals shall be subject to a technical 
approval process. Technical approval shall only be granted to projects which are compliant with the 
standards and procedures set by the Planning Commission. 
 
(2) Findings and recommendations of the independent quality assurance reports and cost and 
benefit analysis and risk assessment, where required as per sub-section (2) section 14, shall be taken 
into account by these forums while considering the development project proposals. 
 
17. Inclusion of development projects in demands for grants.—(1) No development project 
shall be considered for inclusion in demands for grants that has not been granted technical approval. 
 
(2) No development project shall be considered for inclusion in demands for grants unless it is 
provided with a budget allocation for the coming year which fully reflects the proposed project cost 
for each year. 
 
18. Monitoring and evaluation of development projects.—(l) Development projects shall be 
subject to the following forms of monitoring and evaluation, namely:— 
 
 
(a)  monitoring of progress during implementation;  
 
(b)  evaluation of the project on completion; and 
 
(c)  in case of the projects with a total cost exceeding a threshold to be set by the 
Planning Commission, an independent impact assessment within five years after 
completion of the projects. 
 
(2) Timelines, forms and formats and guidance on conducting monitoring and evaluation and 
reporting shall be as may be prescribed. 
   
 
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19. Budgetary provision for maintenance of assets.—(1) Every Ministry and Division shall 
include in its demands for grants adequate funds dedicated for operation and maintenance of the 
physical infrastructure assets under its supervision. 
 
(2) The Planning Commission shall define adequacy requirements for different categories of 
physical infrastructure expressed as the ratio of the annual provision for maintenance and the current 
market value of the asset. 
 
20. Utilization of public assets.—(1) Principal accounting officers shall ensure that the 
maximum possible returns are achieved on each and every asset falling under the oversight of the 
Ministry and Division. 
 
(2) The returns on a public asset may include utilization of the asset for delivery of one or more 
public services or a financial return accruing to the Government from utilization of the potential of the 
asset. 
 
(3) With a view to achieving the maximization of returns on public assets, government may 
establish sovereign wealth funds through an Act of Parliament. The objective of a sovereign wealth 
fund is to act as a holding institution for public assets, which is capable of bringing to bear sound 
management and exploitation of opportunities for the maximization of returns from the public assets. 
 
CHAPTER IV 
CONTROL OF PUBLIC FINANCE 
CONSOLIDATED FUND AND PUBLIC ACCOUNT 
 
21. Federal Consolidated Fund.—(1) All Ministries and Divisions, their attached 
departments and subordinate offices and all public entities if so required by their statutes, shall arrange 
remittance in the Federal Consolidated Fund, without delay, of all revenues including all grants 
received by the Federal Government, all loans raised by the Government and all moneys received by 
it in repayment of any loan and all other moneys into the Public Account of the Federation as required 
under Article 78 of the Constitution. 
 
(2) All loans or grants made to the Federal Government by a foreign government or otherwise 
shall be remitted to the Federal Consolidated Fund and the Controller General of Accounts shall be 
responsible for its proper accounting. 
 
22. Custody of the Federal Consolidated Fund and Public Account of the Federation.—
The operation of the Federal Consolidated Fund and the Public Account of the Federation shall vest in 
the Finance Division under the overall supervision of the Federal Government. 
 
23. Expenditure from Federal Consolidated Fund 1[and Public Account].—(1) No 
authority shall incur or commit any expenditure or enter into any liability involving expenditure from 
the Federal Consolidated Fund and Public Account of the Federation until the same has been 
sanctioned by a competent authority duly empowered and the expenditure has been provided for the 
financial year through— 
 
 
 
 
1Ins. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
 
 
   
 
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(a)  schedule of authorized expenditure; or 
 
(b)  supplementary grant and technical supplementary grant as per Article 84 of the 
Constitution; or 
 
(c)  re-appropriation as per section 1[11]. 
 
(2) No authority shall transfer public moneys for investment or deposit from government 
account 1[including the assignment accounts] to other bank account without prior approval from the 
Federal Government 1[:] 
 
1[Provided that the principal accounting officer in respect of all the spending units under his 
control shall submit a certificate to the Finance Division on half yearly basis.] 
 
(3) Every grant approved by the National Assembly for a financial year and every other 
authority or sanction issued under this Act in respect of a financial year, shall lapse and cease to have 
any effect at the close of that financial year. 
 
24. Withholding of authorized appropriations.—The Finance Division may, with the prior 
approval of the National Assembly, suspend, withdraw, limit or place conditions on any budget 
appropriation or other authority issued by it if the Finance Division is satisfied that such action is 
required by reason of a financial exigency or is in the public interest. 
 
25. Excess expenditure.—(1) The expenditure in excess of the amount of budget grant as well 
as the expenditure not falling within the scope or intention of any budget grant, unless regularized by 
a supplementary grant, shall be treated as excess expenditure. 
 
(2) Excess expenditure shall not become a charge against the Federal Consolidated Fund except 
when— 
 
(a)  The National Assembly approves an additional amount equivalent to 
overspending as a direct charge against the Federal Consolidated Fund as voted 
or charged expenditure; or 
 
(b)  it decides— 
 
(i)  to recover the excess expenditure from the public servants who are found 
to be involved to incur such an expenditure. In this case, the Finance 
Division may take appropriate measures; or 
 
(ii)  to take disciplinary proceedings against the principal accounting officer. 
 
(3) If the Public Accounts Committee recommends the excess expenditure to stand as a charge 
to Federal Consolidated Fund, then it shall be included in the statement of excess expenditure required 
under Article 84 of the Constitution. 
 
 
 
1Subs., ins. and added by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
   
 
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26. Commitment control system.—The Finance Division in consultation with the Auditor 
General shall approve and issue guidelines related to annual and multi -annual commitment control 
systems. 
 
27. Delegation of financial powers.—The Finance Division shall approve regulations for the 
delegation of financial powers based on the following principles, namely:— 
 
(a)  financial powers accorded to the principal accounting officers balance financial 
authority with responsibility for financial propriety as per the applicable 
financial rules and regulations; 
 
(b)  financial powers are accorded with the view to enhance public service delivery; 
and 
 
(c)  allowing the principal accounting officers to delegate financial powers to sub-
ordinate officials. The delegation shall not diminish the responsibility and 
accountability of the principal accounting officers. 
 
1[28. Chief finance and accounts officer.— To assist principal accounting officers in financial 
management, there shall be chief finance and accounts officer posted in Ministries and Divisions as 
recommended by Finance Division to perform  functions as notified and financial advisers’  
organization shall stand disbanded.] 
 
1[29. Chief internal auditor.— (l) Within a period not exceeding  eighteen months from the 
date of commencement of this Act, the position of chief internal auditor shall be created who shall 
work under the direct supervis ion of principal accounting officer. The appointment and functions of 
chief internal auditor shall be as determined by the Finance Division, from time to time.] 
 
2[(2) There shall be an internal audit policy board for over all policy making and setting scope 
and standards, approving internal audit manuals and charter of internal audit, monitoring the overall 
effectiveness of internal audit function for the Government institutions, comprising— 
 
 
 
(a) Secretary, Finance Division                                                              Chairman; 
(b) Controller General of Accounts                                                        Member; 
(c) Deputy Auditor General                                                                    Member; 
(d) Additional Secretary, Finance Division                                     Member and Secretary); 
     (e)     One representative duly appointed by the Member Finance             Member”   
Division from the Institute of Cost and Management Accountants  
 of Pakistan or the Institute of Chartered Accountants of Pakistan or  
Institute of Internal Auditors 
 
(3) Finance Division shall provide secretarial support to the board constituted under sub-section 
(2).] 
 
1Subs. by the Finance Act, 2023 (Act No. XXXIV of 2023), s. 9. 
2Added by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
 
 
 
 
 
   
 
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CHAPTER V 
TREASURY MANAGEMENT 
 
30. Cash management.—(l) The Finance Division, with the approval of the Federal 
Government, shall notify policy and rules under this Act to prescribe an effective cash management 
system for all public entities and special purpose funds leading to treasury single account. Fundamental 
principles and objectives of such policy and rules shall be— 
 
(a)  to anticipate cash needs of Government; 
 
(b)  to ensure availability of cash when it is required; 
 
(c)  to manage cash balance in the Government bank accounts effectively; and 
 
(d)  to neutralize impact of the Government’s cash flows on the domestic banking 
sector. 
 
(2) The policy and rules under this section, inter alia, shall provide for— 
 
(a)  establishing institutional and administrative arrangements needed to manage an 
effective cash management system; 
 
(b)  availability of funds in accordance with schedule of authorized expenditure or 
supplementary grant; 
 
(c)  availability of foreign exchange, where required, from within the allocation of 
foreign exchange sanctioned for the Ministry and Division concerned; 
 
(d)  placement of all public moneys into the treasury single account; 
 
(e)  quarterly revenue, expenditure, cash requirement and debt plan within 
sanctioned budget; 
 
(f)  gradual expansion of budgetary and accounting framework to all autonomous 
entities, declared as such under clause (b) of sub-section (1) of section 1[36]; 
 
(g)  usage of idle cash of the autonomous entities, declared as such under clause (b) 
of sub-section (1) of section 1[36]; and 
 
(h)  require all principal accounting officers to provide the information deemed 
necessary for effective operation of the cash management and treasury single 
account system. 
 
2[(3) The Finance Division shall exempt “Self Accounting Entities (SAEs)” from adoption of 
New Accounting System of ASSAAN Assignment Account.] 
 
31. Government banking arrangements.—(1) The Federal Government shall maintain its 
Federal Consolidated Fund Account 1[and the Public Account of the Federation] in the State Bank of 
 
1Subs. and ins. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
2Ins. by the Finance Act, 2021 (Act No. VIII of 2021), s. 9. 
 
 
   
 
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Pakistan and it may open its such other bank accounts as may be required by the Finance Division, 
from time to time, in accordance with the State Bank of Pakistan Act, 1956 (XXXIII of 1956). 
 
(2) These accounts shall be operated by such authorized signatories as may be prescribed by 
the Finance Division. 
 
(3) For the purpose of effective financial management and taking corrective measures to ensure 
financial discipline, all banks in Pakistan shall provide such information of all accounts maintained by 
Ministries and Divisions, attached departments and subordinate offices and public entities as shall be 
required by the Finance Division, from time to time, through State Bank of Pakistan. 
 
CHAPTER VI 
SPECIAL PURPOSE FUNDS 
 
32. Special purpose funds.—(1) If monies have been appropriated by the National Assembly 
1[for a fund established under any law or with the approval of the Federal Government], the Finance 
Division shall notify rules or regulations and issue directives for the management and control of such 
a fund. Any statutory instrument shall— 
 
(a)  state the purposes for which the special fund has been established; 
 
(b)  identify the principal accounting officer responsible for its operations; and 
 
(c)  specify that the cash balances of such funds shall form part of Public Account 
of the Federation. 
 
(2) Such funds shall be subject to audit by the Auditor-General of Pakistan. 
 
(3) Where the Federal Government is satisfied that either— 
 
(a)  the purposes for which any special fund was established have been fully served; 
or 
 
(b)  it is in the public interest to wind up a special fund, 
 
it shall notify dissolution of the said special fund and any credit balances in such fund shall be 
transferred to the Federal Consolidated Fund. An evaluation report and regulation of such funds shall 
be notified by the Finance Division. 
 
2[(4) The legal framework of pay, allowances and retirement benefits may be promulgated 
through an Act of Parliament within a period not exceeding twenty-four months. 
 
(5) The Finance Division, with the approval of the Go vernment, shall establish pension fund 
by the end of the financial year 2023 -24 to help discharge liabilities of the existing defined benefits 
pension scheme and new contributory pension scheme. 
 
(6) The Finance Division, with the approval of the Government, may introduce a contributory 
pension scheme for new employees entering the Government service from a date approved by the 
Federal Government.] 
 
 
1Subs. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
2Added. by the Finance Act, 2023 (Act No. XXXIV of 2023), s. 9. 
 
   
 
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CHAPTER VII 
ACCOUNTING AND REPORTING 
 
33. Controller General of Accounts.—The Controller General of Accounts shall perform his 
functions in accordance with the provisions of the Controller General of Accounts (Appointment, 
Functions and Powers) Ordinance, 2001 (XXIV of 2001). 
 
34. Mid-year reporting of budget developments.—(1) By twenty-eighth February each year, 
the Federal Government shall place mid-year review report before the National Assembly. The report 
shall provide budget and actual comparison of revenues, expenditure and financing. 
 
            (2) After placing the mid-year review report in the National Assembly, the Finance Division 
shall publish the report on its official website. 
 
35. Year-end government performance monitoring report.—Starting from the financial 
year 2021-22, the Federal Government shall place, within six months of close of financial year, before 
National Assembly, a government performance monitoring report detailing— 
 
(a)  budget and expenditure by outputs; and 
 
(b)  planned and delivered key performance targets. 
 
 
CHAPTER VIII 
PUBLIC ENTITIES 
 
36. Public entities.—(1) Where— 
 
(a)  any board, commission, company, corporation, trust or other fund or account is 
established by or under any law which is fully or substantially funded either 
from the Federal Consolidated Fund or by way of taxes, levies, duties or other 
public monies accruing to it in terms of any laws; or 
 
(b)  any entity other than a state enterprise is established by or under any law, the 
activities of which may result in a financial commitment or other liability being 
incurred by the Government,  
 
the Federal Government may declare such entity to be a public entity for the purposes of this 
Act. 
 
(2) The Federal Government shall, by notification in the official Gazette, classify public entities 
as— 
 
(a)  Government’s business enterprises, including public limited companies or 
registered companies under the law regulating companies or banking; or 
 
(b)  autonomous entities, which include all public entities that are not Government’s 
business enterprises, which have been established to provide regulatory, 
research, development and training or are producing goods or services on non-
commercial basis. 
 
(3) The Finance Division shall be responsible for notifying the policy framework and 
guidelines for financial management of Government’s business enterprises and autonomous entities, 
including those related to internal controls, borrowing, cash management, accounting, reporting and 
external audit. 
 
   
 
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37. Self-generated revenues.—(1) Revenues collected by an autonomous entity, which arise 
from any Act or statutory instruments of the Federal Government shall be deposited into the treasury 
single account. 
 
(2) The Finance Division shall, with approval of the Federal Government, notify policy and 
guidelines and may issue regulations on the utilization of revenues generated by autonomous entities. 
 
38. Preparation of accounts.—(1) Accounts of Government’s business enterprises shall be 
prepared in accordance with the provisions of the relevant law. Copy of the audited financial statements 
shall be made available to the Finance Division within three months of their certification. 
 
(2) The accounts of autonomous entities shall be prepared in accordance with instructions 
issued by the Controller General of Accounts with approval of the Auditor General. Copy of annual 
accounts shall be made available to the Finance Division within three months of their finalization. 
 
(3) Audited financial statements and annual accounts referred to in sub-section (1) and sub-
section (2) shall be laid before Parliament by President of Pakistan along with other accounts of Federal 
Government not later than one month after the same are submitted by Auditor-General, except that, if 
Parliament is not in session, then the accounts shall be laid before it on the first day of the following 
session. 
 
(4) Any reports laid before Parliament under sub-section (3) shall be referred to the Public 
Accounts Committee of Parliament. 
 
39. Audit.—(1) The audit of all public business enterprises shall be in accordance with the 
provisions of the relevant law. 
 
(2) The audit of autonomous entities classified shall be in accordance with instructions issued 
by the Auditor-General. 
 
40. Dissolution of public entity.—Where the public entity established under any law or legal 
instrument stands dissolved or has been wound up, any monies or other resources standing to the credit 
of the public entity at the time of dissolution or winding up shall be paid into the Federal Consolidated 
Fund. 
 
1[CHAPTER VIII A 
NON TAX REVENUE 
 
40A. Policy and administration.—(1) The administrative ministries and divisions shall be 
responsible for policy formulation and administration of non tax revenue as per the distribution of 
business approved by the Government. 
 
(2) The Finance Division shall advise ministries and divisions in policy formulation as per the 
strategic priorities of Government’s revenue policies. 
 
40B. Levy and collection. —(1) Non tax revenue shall be levied and charged in accordance 
with the provisions of relevant laws and such other applicable instruments. 
 
(2) Notwithstanding anything to the contrary contained in any other law for the time being in 
force, public entities as defined under section 36 shall pay non tax revenue representing— 
 
 
1Ins. by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
   
 
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(a)  mark up on loans lent by the Government, as per the amortization schedule 
attached with the financing agreement; 
 
(b)  dividend against the Government’s equity investments as declared by the 
respective board of directors out of accrued profits of the entity: 
 
Provided that if public entity is wholly or substantially owned by the 
Government, proposals with regard to declaration of dividend and allocation for 
reserve fund, capital requirement s etc  shall be examined by the controlling 
Division in cons ultation with the Finance Division before deliberations and 
decision in the board of directors. 
 
(c)  surplus profits as per the provisions of relevant laws; and 
 
(d)  any other amount owed to the Government as accrued: 
 
Provided that the public entities shall pay accrued amounts of non-tax revenue 
as per clauses (a) to (d) being the first charge on their gross revenues or profits, 
as the case may be. 
 
(3) Non tax revenue representing foreign grants and payments, receipts from provision of 
services, rents, recovery of overpayments, sale of property etc shall accrue on completion of the 
prescribed process. 
 
(4) The revenue collection offices shall be responsible for collection of all the accrued amounts 
of non tax revenue from liable public entities, individuals, firms, companies etc as per the time 
specified in the relevant laws and rules. Finance Division shall prescribe procedures for monitoring 
and reporting of non tax revenue by the revenue collection offices. 
 
40C. Deposit in Federal Consolidated Fund.—(1) Subject to section 40B, the revenue 
collection offices shall deposit the collected amounts in Federal Consolidated Fund promptly without 
delay in prescribed manner under the head of account specified by the Finance Division in consultation 
with the Controller General of Accounts. 
 
(2) The revenue collection offices shall not retain or appropriate the collected amounts to meet 
departmental expenditures except through budgetary mechanism as provided under Articles 80 to 83 
of the Constitution. 
 
40D. Late payment surcharge.—(1) Notwithstanding anything to the contrary contained in 
any other law for the time being in force, an amount equal to monthly weighted financing cost of 
Government’s domestic borrowings shall be payable during the period of default, in addition to the 
amount due under section 40B if not paid within the stipulated time. 
 
(2) Finance Division may prescribe procedure for levy and collection of the surcharge under 
sub-section (1). 
 
40E. Recovery of non tax revenue by Commissioner (Inland Revenue).— (1) If the amounts 
as per sections 40B and 40D are not paid within ninety days of having been due, the Finance Division, 
in consultation with the concerned Division may refer any defaulter’s case to the Commissioner 
(Inland Revenue) concerned for recovery as it were an arrear of income tax. 
   
 
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(2) The Commissioner (Inland Revenue) shall recover the arrear in accordance with the 
provisions of the Income Tax Ordinance, 2001(XLIX of 2001) and deposit the receipt in the Federal 
Consolidated Fund as per section 40C.] 
 
CHAPTER IX 
REMOVAL OF DIFFICULTY AND POWER TO MAKE RULES 
 
41. Removal of difficulty.—If any difficulty arises in giving effect to the provisions of this 
Act, Government may make such order, not inconsistent with the provisions of this Act, as it may 
consider necessary for removal of such difficulty. 
 
42. Power to make rules.—(1) The Federal Government may, by notification in the official 
Gazette, make rules for carrying out the purposes of this Act. 
 
(2) All existing instruments shall continue in force until altered, amended or repealed by such 
authority competent to alter, amend or repeal the same 1[:] 
 
1[Provided that existing instruments, contrary to the provisions of this Act and the rules made 
thereunder, shall have no legal effect.] 
 
(3) The existing instruments shall include— 
 
(a)  The General Financial Rules;  
 
(b)  Federal Treasury Rules; 
 
(c)  Fundamental Rules and Supplementary Rules;  
 
(d)  Civil Service Regulations; 
 
(e)  Provident Fund Rules;  
 
(f)  Civil Pension Rules; 
 
(g)  Methods and procedures prescribed by the Auditor-General of Pakistan with 
reference to deposit and withdrawal of public money; 
 
(h)  Public Works Department Code; 
 
(i)  the New System of Financial Control and Budgeting, 2018; 
 
(j)  the Central Public Works Account Code; 
 
(k)  the Accounting Policies and Procedures Manual;  
 
(l)  other Financial Regulations consistent with the above rules; and 
 
 
 
1Subs. and added by the Finance Act, 2020 (Act No. XIX of 2020), s. 9. 
 
   
 
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(m)  all amendments, schedules, manuals, notifications, forms, appendixes, orders, 
circulars, codes, instructions, directives, guidelines, clarifications and any other 
supplementary legal instruments relating to any of those rules, in each case as 
in force in the Federal Government before commencement of this Act. 
 
(4) All the existing public finance management and administration including the rules, 
regulations and all amendments, schedules, manuals, notifications, forms, appendixes, orders, 
circulars, codes, instructions, directives, guidelines, clarifications and any other supplementary legal 
instruments relating to any of those rules, in each case as in force in the Federal Government before 
commencement of this Act shall be made consistent with this Act through appropriate amendments 
where required. 
 
43. Budget manual.—Within a period of six months from commencement of this Act, the 
Finance Division shall approve a budget manual, to be published as well as placed on the Federal 
Government’s website. 
 
44. Implementation and improvement.—The Federal Government shall constitute a 
committee to oversee implementation of this Act and its secondary legislation. The committee shall 
also enlist global best practices of the public finance management and shall recommend improvements 
in this Act and its secondary legislation from time to time. 
 
45. Overriding effect.—This Act shall have overriding effect over all other laws and any law 
inconsistent with this Act in contradiction with this Act shall be amended to the extent of the 
inconsistency. 
 
___________ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RGN Date: 24-11-2025