ISLAMABAD – The federal government could not convince International Monetary Fund (IMF) to agree to a reduction in the sales tax on electricity bills, the sources close to the development said on Wednesday.
“The IMF rejected the Ministry of Energy’s request in which the government sought the Fund’s approval to reduce the sales tax on the electricity bills,” said the sources.
The IMF, the sources said, stated that under the loan program, the exemptions on new taxes could not be granted. They also revealed that the IMF clarified that providing a sales tax exemption would make it impossible to meet tax revenue targets.
It may be mentioned here that an 18 percent GST is levied twice on electricity bills.
First, 18 per cent tax is applied to the total amount of the bill, and secondly, sales tax is also charged on the fuel cost adjustment.
Just a day ago, a sigh of relief for power consumers as NEPRA revised electricity prices for government-owned Distribution Companies (DISCOs) and K-Electric.
DISCOs consumers got Rs0.75 relief per unit, while K-Electric consumers will see a reduction of 49 paisas per unit. NEPRA revised the rates under monthly fuel price adjustment, with price cut for DISCOs related to the November Fuel Cost Adjustment (FCA) and for K-Electric based on October fuel adjustment.
National Electric Power Regulatory Authority (NEPRA) issued formal notification and relief will be adjusted in January electricity bills.
In a similar development, Prime Minister Shehbaz Sharif rejected proposal to integrate employees from Generation Companies into Power Distribution Companies (DISCOs) and instead instructed DISCOs to hire new staff.
This decision follows performance review of DISCOs, including FESCO, LESCO, and PESCO. The premier emphasized transparency and merit in recruitment, particularly for leadership roles, and ordered that Gencos employees not absorbed into DISCOs should be returned to Gencos or offered voluntary retirement.
PM Sharif also instructed DISCOs to automate complaint handling, set targets for resolving complaints within 24 hours, and develop strategies to address overbilling and power theft. .y June 2025 was mandated.
Electricity Relief Package for Winter 2024 rolled out with up to Rs26 cut in Per Unit Cost
