The tendencies ofcentralization of power inPakistan since independenceled to many constitutional and politicalcontroversies. Itculminated in the shape of seceding of one part (East Pakistan)in 1971. It was hoped to get a lessonfrom this great tragedy but in vain. In the post-1971 period,the case ofKP in respect of itsgrievances against the center on the subject of tobacco and revenue generated from the associated industry is a glaring example.In 2010, an attempt was madein the 18th amendmentto

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... e-regulate the center-province relations.However, keepingin view the control of the federal government over Pakistan Tobacco Board and tobacco revenuenot onlya bone of contention between the province and center rather italsoquestions the claim of ensuring provincial autonomy in the 18thamendments. Tobacco has the potential to transform the rural economy bycreating huge opportunities for employment, revenuefor the national exchequer,and earningsforthelocal concerned people. Tobaccocontributes more than half of federal excise duty (FED) to the national exchequer.This paper examines the taxation system of tobacco, its division, and utilization issues and an attempt to discuss comparatively the steps taken about resources distribution among the federating units and its outcomes. In-depth interviews and focused group discussions with the concerned policymakers, farmers, politicians and political workers and stakeholders of the targeted area remained the main sources of data collection.