In recent times, escalating electricity prices have unveiled a hidden world of taxes and duties lurking within electricity bills, casting a shadow over the daily lives of consumers. iCouncil, a financial advisory firm renowned for its expertise in analysis and advisory services, has meticulously documented these charges, revealing the financial strain faced by ordinary citizens.
1. Electricity Duty:
Electricity Duty, a provincial levy ranging from one to 1.5 percent, is imposed on variable electricity charges for all consumers.
2. General Sales Tax (GST):
Mandated by the Sales Tax Act of 1990, GST adds an 18 percent tax to the total electricity bill for consumers across the board.
3. PTV License Fee:
Domestic consumers bear a Rs 35 fee, while commercial counterparts are charged Rs 60 as a license fee, contributing to their overall electricity expenses.
4. Financing Cost Surcharge: Except for lifeline domestic consumers, all other categories face a surcharge of Rs 0.43 per kilowatt-hour (kWh).
5. Fuel Price Adjustment (FPA): FPA reflects the variance between actual fuel costs and reference fuel charges. Positive fluctuations in FPA raise electricity bills, while negative fluctuations offer relief, in compliance with the National Electric Power Regulatory Authority (NEPRA) directives.
6. Extra Tax:
Industrial and commercial consumers, not registered as active taxpayers with the Federal Board of Revenue (FBR), incur an additional tax ranging from 5 to 8 percent, depending on their total bill amount.
7. Further Tax:
A four percent tax applies to consumers lacking a Sales Tax Registration Number (STRN), with exceptions for domestic, agriculture, bulk, and streetlight connections.
8. Sales Tax:
Commercial consumers are subject to a 5 percent sales tax for bills under Rs 20,000 and a 7.5 percent tax for bills surpassing this threshold.
9. Income Tax:
Income tax rates vary based on the total bill amount. Tax-filing domestic consumers are exempt, while non-filers face a 7.5 percent income tax when their electricity bill exceeds Rs 25,000.
The hidden fees in electricity bills worry citizens, adding to the burden of higher utility costs. These charges have led to calls for more transparency and a review of taxes to ease the burden on people.
