How many taxes are power consumers paying in electricity bills?

 

The power bills include several taxes and tariffs which are collected directly from the consumers while the amount of consumers’ electricity bills depends on the units they consumed during the monthly billing period, reported the 24NewsHD TV channel.   

The consumers’ bills include amounts payable to the distribution companies and amounts payable to the government as revenue.

In total, the Discos charge eight different taxes in the name of adjustments and three under the banner of surcharges.

The Fuel Price Adjustment (FPA) is calculated based on the price of fuel from which electricity was generated. This includes coal, gas and furnace oil. If the price of fuel is found to be higher at the time of electricity generation, the authorities can charge the additional amount in the next billing month.

The FPA is dependent on the value of the rupee and fuel prices in the international market.

The Financing Cost Surcharge is charged to the end consumers to raise additional revenue to finance the power sector’s debt and liabilities.

As per Ministry of Energy, Financing Cost Surcharge is charged at the rate of Rs.0.43 per kWh, applicable to all categories of consumers except life line domestic consumers.

The power consumers are burdened with another hike in the name of Quarterly Adjustment after the government jacks up the price of electricity.

Besides, the government collects billions under the general sales tax, at the rate of 18% on all consumers. This tax, the highest in the bill, is directly collected by the government to generate revenue.

The consumers are charged additional taxes on their income in the electricity bill if they are non-filers.

The income tax is collected on bills amounting to more than Rs25,000, which is around 7% of the total bill amount.

If the power consumers are filers in FBR and paying income tax in electricity bills can instantly submit their details online on the PITC website.

After registering with Power Information Technology Company, the income tax did not come in the electricity bills.

This year alone, according to the estimate, Rs 2800 billion rupees of electricity was purchased, in which Rs 2000 billion was allocated for capacity payment.

Rs 2000 billion to be paid in the next financial year as capacity payment.