Wapda defends tax exemption to its entities

Water and Power Development Authority (Wapda) sees recent decision of Central Board of Revenue (CBR) giving exemption of income tax to the corportised entities of Wapda with retrospective effect' as "a step forward" towards corporatisation of the utility.
Imtiaz Anjum, Member (Finance) Wapda, told Business Recorder here on Wednesday that income tax exemption to corportised entities of Wapda has removed another hurdle towards announcement of new tariff by Wapda's corportised entities. The CBR's decision is directly linked with the announcement of tariff of Wapda's corportised entities, he said.
It may be mentioned that CBR, while amending Income Tax Ordinance (XLIX of 2001) has inserted a new clause in the ordinance under which any income derived by the corportised entities of Wapda from the date of their creation up to the date of completion of the process of corporatisation ie till the tariff is notified, is exempted from the levy of income tax."
It may be further mentioned that new tariff for Wapda entities, which is due since few years are yet to be notified.
To a question, Imtiaz Anjum said that he would be able to give detailed comments on this decision of CBR after going through the Finance Bill and circular issued by CBR.
He said that Wapda had made a formal request to the federal government in May this year for giving income tax exemption to Wapda's corportised entities. The exemption given by the CBR would finish when Wapda's corportisation process would complete.
It may be recalled that National Electric Power Regulatory Authority (Nepra) had announced tariff for some of Wapda's corportised entities, but the same could not be notified by the federal government as some of the companies had approached Nepra for revision of tariff.
To a question, he said it would premature to assess the financial worth/quantum of the tax exemption allowed to Wapda's corportised entities. The exemption announced by the CBR is just a formality, as at present Wapda's corportised entities are not getting any income, he added.
To another question, he said that he is not in a position to comment on the impact of CBR's exemption on other private sector companies doing business with Wapda.
When contacted, Chaudhry Muhammad Akram Arain, Chief Executive Lesco said that recent decision of CBR is a stop gap arrangement under which already available facility of exemption of income tax will be admissible to Wapda's corportised entities till the announcement of tariff.
'Wapda is a public sector organisation and income tax is applicable only when the entity is corportised. Wapda's corportisation would be completed after the announcement of tariff by corportised entities', he said. He said that Nepra is conducting hearings and announcement regarding new tariff of corportised entities is expected soon.