ISLAMABAD: Nawaz Sharif-led federal government has collected more than Rs 59.465 billion in a year from power consumers by levying five different forms of sales tax, revealed a report submitted to the Senate Standing Committee on Finance.
The report orchestrated by the Federal Board of Revenue (FBR), which is now available with Daily Times, gives glimpses of how an elected government used brutal taxing system in order to fleece the poor consumers of the country from their hard earned money.
The report stated that the Finance Ministry led by Ishaq Dar, a well-versed chartered accountant, had imposed five different forms of sales tax on electricity bills that was the main reason for inflated bills.
The report noted that during fiscal year 2014-15 the government collected Rs 32,902 million as sales tax, while it collected Rs 59,465 million during 2015-16.
The Finance Ministry levied sales tax in five different forms: 17% general sales tax, 5% extra tax, 3% further tax, 5% sales tax on per KWH basis on supplies of steel melters and re-rollers and sales taxes at the rate of 7.5% from retailers, the report added.
The report was prepared and submitted on a question raised by MQM Senator Col (r) Syed Tahir Mashhadi and this important issue was sent to the Finance Ministry for information regarding the imposition of tax on electricity bills.
The FBR informed the committee that the government had imposed sales taxes at the rate of 17% ad valorem on all taxable supplies under section 3(1) of the Sales Tax Act, 1990, including supply of electricity. The rate of 17% is applicable since July 2013. Prior to this, the rate was 16% ad valorem.
The last year of Pakistan People’s Party-led government received Rs 4,833 million by imposing sales tax on power bills. The FBR further said that extra tax at the rate of 5% was being collected from power consumers by promulgating SRO 509-2013 under the Sales Tax Act, 1990, on electricity supply to industrial and commercial consumers whose electricity bill exceeds Rs 15,000 in a month and who have either not registered for sales tax or whose names do not appear on the active taxpayers’ list maintained by the FBR.
The government collected Rs 3,182 million under further tax regime at the rate of 2% that is also a form of sales tax and this had been imposed on all supplies to unregistered persons. However, further tax is not applicable to domestic consumers as per SRO 648-2013.
Further tax was introduced in Finance Act, 2013 and its rate was initially 1%. Now it has been enhanced to 2% since 2015, the report added.
Nawaz Sharif led regime collected Rs 21.530 billion in a year under sales tax on per KWH basis on supplies to steel melters and re-rollers. This tax is also another form of sales tax regime and is being collected by DISCOs, while the current rate of this tax is Rs 9 per KWH, which is inclusive of 17% sales tax. The report says that the government received Rs 2,196 million under sales tax at 5% and 7.5% from retailers under Section 3 of the Sales Tax Act, 1990.
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