Karachi Administrator Murtaza Wahab resigns after KE stopped from collecting local tax via bills

Karachi Administrator Murtaza Wahab resigned from his position on Monday after the Sindh High Court (SHC) struck down his decision to charge Municipal Utility Charges and Taxes (MUCT) for Karachi Metropolitan Corporation (KMC) through consumers’ electricity bills.

In a press conference, he said K-Electric was chosen to collect MUCT because it is a public limited company that is audited regularly.

“K-Electric (KE) is regulated by National Electric Power Regulatory Authority (Nepra) and submits its balance sheet to the Pakistan Stock Exchange (PSX),” he said. “These are the reasons why I opted to delegate the responsibility of collecting MUCT to a large company instead of private contractors.”

SHC stops K-Electric from collecting municipal charges through electricity bills

It also enabled KMC to approach the Securities and Exchange Commission of Pakistan (SECP) and Nepra in case an issue arose with KE, Wahab said.

According to him, collection of MUCT through KE would have raised KMC’s revenues from Rs160 million to Rs3.25 billion and made it more efficient as the entire process would have been documented.

He also clarified that he implemented the decision in light of article 100 of the Sindh Local Government Act.

“We took this matter to the cabinet and notified the public,” he said. “The entire process took one year.”

KE terms power to levy tax ‘govt domain’

Following SHC’s decision, “we all know that our efforts will now be fruitless,” Wahab said. He added that he will continue serving the city as there was no need to hold a position for it, lamenting that the policy of commercialisation has ruined the infrastructure of Karachi.

On Monday morning, SHC ordered K-Electric to stop collecting MUCT for KMC through consumers’ electricity bills.

During the hearing, Wahab had argued that addition of KMC charges in electricity bills can enhance revenue collection, with the additional amount used to uplift Karachi.

The court said taxes collected by KMC, prior to this move, were not utilized in Karachi. Wahab replied that they were being used to pay for different uplift schemes across the city.

The court noted that the state of sewerage and infrastructure of Karachi was in deplorable condition “hence we are unable to see where the tax is being used.”