ISLAMABAD: National Electric Power Regulatory Authority (Nepra) is said to have rescued itself from issuing any instructions to Karachi Electric (KE) for collection of Municipal Utility Charges and Tax (MUCT) from citizens on behalf of Karachi Metropolitan Corporation (KMC).
"Several taxes, levies and charges, fees, etc., are being recovered through electricity bills under the relevant provisions of law, and approval of Nepra in this regard was not required, since it is not our domain. Therefore, the matter may be processed in accordance with the relevant provincial/ federal laws," said Director Nepra, Iftikhar Ali in his written response to a letter of Secretary Energy, Sindh in mid of last month. The copy of the letter has also been sent to Secretary Power Division.
Last month, Director General Nepra, Consumer Affairs Division (CAD) Naweed Illahi Shaikh testified before a panel of National Assembly that the regulator has received a letter from Sindh government regarding collection of taxes through KE but no decision has yet been taken by the regulator. He argued that the regulator will consult all the stakeholders prior to taking any decision in this regard.
Nepra's Legal Advisor Maria Rafique also argued that tax factor is a legal issue. She said that if Sindh government instructs the regulator to allow KE to collect local taxes through bills, the latter will inform the former that tax is a legislative issue.
"Tax can only be collected if it is part of the law as it does not fall in the purview of Executive. Nepra received letter from Sindh government on September 16, 2021 and will send its legal stance to the provincial government," she added.
Secretary Energy Sindh, Abu Bakar Ahmed, in his letter to Chairman Nepra, stated that Municipal Commissioner, Karachi Metropolitan Corporation has requested to approach Nepra to permit KE to collect Municipal utility bill charges and tax on behalf of KMC through its monthly electricity bill from Karachi Division and for signing of a formal MoU between KMC and KE.
According to Secretary Energy, KMC is suffering from financial constraint and it's recovery of charges are not up to the mark. The poor financial status of KMC is affecting overall performance and efficiency, resulting in increase in complaints from the people of Karachi.
In this regard, Chief Minister, Sindh also called a meeting on September 8, 2021 in which CEO, KE showed his conditional consent for inclusion of taxes/ charges in electricity bill of KE subject to approval from the Ministry of Energy, Government of Pakistan and Nepra.
Copyright Business Recorder, 2021