Tuesday, October 3, 2023

How Much Taxes Are You Paying In Electricity Bills?

Officials of the Power Division have informed the Senate Standing Committee on Power of the details of the taxes levied in the electricity bills.

A meeting of the Senate Standing Committee on Power was held under the chairmanship of Senator Saifullah Abro, in which the officials of the Ministry of Power Division also participated.

Chairman Committee Saifullah Abaro asked why the price of electricity has increased, and told the reason. Joint Secretary Power Finance Mahfooz Bhatti said that last financial year capacity payments were 1300 billion rupees while this financial year capacity payments of the power sector are estimated to be 2000 billion rupees.

Officials of the Central Power Purchasing Agency (CCPA) told the Senate Committee that the increase of 500 billion rupees in the capacity payment is due to the exchange rate of the dollar and the rupee.

Saifullah Abaro asked that if the contracts with IPPs were not in dollars, electricity would not have been expensive, while Senator Bahramand Tangi inquired whether the electricity was reduced when the dollar went down.

Power division officials said that it is given in quarterly adjustments, to which Senator Bahramand Tangi said, “Don’t talk about it, show where it is.”

Senator Saifullah Niazi said that there are different expiry dates for different IPPs, on which the Power Division officials said that the 1994 IPPs will expire in 2027.

Saifullah Niazi asked when will these IPPs contracts die? While Senator Bahramand Tangi said that people are burning bills, who is responsible, protests are happening from Khyber to Karachi, the situation is bad and going towards civil disobedience, the country is getting weak, who is responsible. 

Senator Fida Muhammad asked how many taxes are there on the electricity bill, to which the officials of the Power Division said that there are different types of taxes, there are 7 types of taxes on the bills, including GST, income tax and withholding tax, among other taxes. 

Chairman Committee Saifullah Abaru said that the officials of the Power Division are not able to answer our questions. What might the power division have told the prime minister on electricity yesterday, reduce the profit of IPPs, the price of electricity will be reduced, stop capacity payments to IPPs.

Senator Saifullah Niazi said that only pay the price of electricity to those who take electricity, while Senator Saifullah Abro said that if capacity payments are not stopped, it is a disaster, IPPs should not be considered ghosts, reduce the price of electricity. Our children’s future is a problem.

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