Govt announces withdrawal of fixed tax on small traders’ electric bills

Old system will remain intact for first three months of FY23

ISLAMABAD: The federal government on Thursday decided to withdraw the fixed tax regime on electricity bills for small traders who can benefit from this for a period of one year.

The announcement in this regard was made by Federal Minister for Finance and Revenue Miftah Ismail and Federal Minister for Power Khurram Dastgir Khan.

Miftah Ismail said that Prime Minister Shahbaz Sharif and Maryam Nawaz had given directions to review this matter and after deliberating for a whole day, the government decided to withdraw the fixed tax for small traders for a period of one year.

However, Khurram Dastgir said that the old system will remain intact for the first three months of the current fiscal year and the government will discuss the fixed tax regime with traders after three months.

It is pertinent to mention here that the government had introduced a fixed tax for small traders on their electricity bills in the FY23 budget.

As per the decision, commercial electricity bills up to Rs30,000 would be levied with a fixed tax of Rs3,000 as of July 1, Rs5,000 tax would be levied on bills between Rs30,001 and Rs50,000 whereas bills exceeding Rs50,000 but below Rs100,000 would be subjected to a fixed tax of Rs10,000.

The aforementioned rates were applicable for small traders and retailers who are on the Active Taxpayers’ List and have cleared all dues for the years 2020 and 2021. Non-filers would be automatically charged double the amount.

Recently, it emerged that unregistered consumers with zero or minimal units were being charged Rs6,000 monthly tax on electricity bills.

Subsequently, Finance Minister Miftah Ismail had announced a revision in the scheme under which up to 150 units of electricity consumption were exempted from the tax. He also removed the condition to charge double the amount of tax from unregistered traders besides granting immunity from tax notices, audits and raids by FBR officers.

According to FBR, There are about 900,000 retail shops in Pakistan and the government wants to bring up to 300,000 of these shops into the tax net.

 

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Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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