Recent documents reveal the heavy tax burden imposed on electricity consumers, significantly influencing both their utility costs and the government’s revenue stream.
The government generates an impressive Rs954 billion annually from taxes on electricity bills, with Rs391 billion collected by the federal government and Rs563 billion allocated to the provinces.
The breakdown of tax revenue is as follows:
- General Sales Tax (GST): An 18% GST on all consumers, including households, businesses, industries, and agricultural users, forms a major part of the revenue.
- Income Tax: Rs98 billion is collected through income tax, ranging between 10% and 12% of electricity bills.
- Advance Tax: A 7.5% advance tax on 25,000 bills from non-filers adds Rs4 billion to the total.
- Additional Tax: Rs13 billion is generated through various extra tax measures.
- Extra Sales Tax: An additional Rs54 billion comes from extra sales tax.
- Retailers’ Sales Tax: A 7.5% tax on retailers contributes Rs9 billion.
- Electricity Duty: A 1.5% duty on electricity usage yields Rs53 billion.
- PTV Fee: Rs14 billion is collected for Pakistan Television (PTV) services.
Overall, electricity bills carry eight different types of taxes, with consumers paying an average of Rs9 per unit in taxes.
This detailed tax structure underscores the crucial role of electricity bill taxes in government revenue and highlights the multiple income streams derived from utility services.