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Tuesday December 06, 2022

Taxes on power bills range between 40-58pc, Senate panel told

By Our Correspondent
November 24, 2022
A foreign currency dealer counts US dollars at a shop in Karachi, Pakistan, May 19, 2022. — AFP/File
A foreign currency dealer counts US dollars at a shop in Karachi, Pakistan, May 19, 2022. — AFP/File

ISLAMABAD: The Senate Standing Committee on Finance and Revenues was informed on Wednesday that the effective rate of taxation on electricity bills ranged between 40 and 58 per cent per unit on commercial connections and 29 per cent on domestic consumers.

The committee held its meeting under Senator Saleem Mandviwalla here at the Parliament House in which the chairman inquired from FBR officials about the exact quantum of taxes being charged on electricity bills. He said they were receiving rampant complaints with regard to heavy taxation on power bills. The FBR officials replied that there were various taxes on electricity bills, including 17 per cent General Sales Tax (GST). They said that the impact of taxes on per unit electricity for commercial consumers ranged between 40 and 58 per cent and 29 per cent on domestic consumers. The extra tax was chargeable on supplies of electric power to industrial or commercial connections. Senators belonging to different political parties stated that in the presence of heavy taxation, there should be an element of facilitation for having one window tax policy. The chairman, while taking up the matter of FBR cases pending for adjudication in courts and the total amount stuck due to litigation, said the FBR needed to stop filing useless cases. The details of pending litigation cases as of 31.10.2022 were tabled before the committee with a total number being 13,296. The committee was told that the pending litigation cases of Inland Revenue till 31-10-2022 were 75,021, amounting to Rs2.382 trillion.

On the issue of containers stuck at the Port Qasim, the committee was informed that presently 988 containers were held up at the port, of the total 3,000 containers at Port Qasim; 1,012 had been cleared and another 600 would be released soon. Around 860 containers were also held due to non-fulfilment of various IPO conditions, contraventions/misdeclaration and court cases. The meeting was informed that restriction on foreign travellers to purchase dollars through cheques and limit to carry dollars would remain in force to strengthen the regulatory regime and improve documentation. The meeting was informed that to control unnecessary outflow of funds, the State Bank of Pakistan (SBP) revised the cash-carrying limits abroad.

Minister of State for Finance Aisha Ghaus Pasha informed the members that the restriction on foreign travellers to buy dollars only through cheques and the cash-carrying limit reduction by $5,000 from $10,000 would remain in force to strengthen the regulatory regime, improve documentation and control illegal activity. It was advised that all foreign currency outward remittances/sale transactions of $2,000 or above (or equivalent in other currencies) against rupees would be conducted by exchange companies through bank transfer/cheque from the personal account of customer.

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