Pakistan, Aug. 16 -- The Khyber Pakhtunkhwa government has rejected a federal proposal for an at-source deduction of Rs6.4 billion from federal transfers payable to the provinces.

Details show that on Aug 5, the Finance Ministry informed the Accountant General of Pakistan Revenues (AGPR) Peshawar office about the proposed at-source deduction.

"I am directed to convey at source deduction of Rs6.4 billion for the month of July 2026, on behalf of government of Khyber Pakhtunkhwa," the letter said.

It said that the amount was adjustable in the accounts for FY 2026-27, requesting a formal advice of adjustment, when carried out, to be provided to the division.

However, on Thursday, KP Finance Department wrote to the Accountant General KP, s...