MONDAY JANUARY 10: Unrelated taxes/charges: Nepra opposes collection through bills

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) is said to have opposed collection of taxes/charges, including TV licence fee, from power consumers through electricity bills, official sources told Business Recorder.
"The matter of collecting non-tariff components must be taken at the appropriate fora for collecting thereof separately through other means to bring the electricity bills to the level of actual tariff," said Nepra Registrar Safeer Hussain in a letter to Secretary, Cabinet Division.
Giving the background, sources said, the President of Pakistan People's Party (PPP), District Gujranwala, Muhammad Abdullah Virk, had written a letter to Prime Minister Yousuf Raza Gilani demanding exclusion of different unwarranted taxes and duties levied upon the consumers of Wapda in electricity bills.
Nepra, while determining consumer-end tariff of various distribution companies, had noted that tariffs of all discos are increasing due to the following reasons: (i) hydel generation share in the generation mix of the country has significantly decreased; (ii) most of the new generation capacity induction is on RFO; (iii) generation of gas has decreased substantially and corresponding generation has to be done on oil; (iv) oil and gas prices are continuously increasing; and (v) Pakistani rupee devaluation against dollar.
Electricity tariff has increased significantly over the last two years. Although the government is still providing subsidy to electricity consumers, the government has decided to eliminate the subsidy gradually. Therefore, the passed on cost to the consumers of electricity is being increased.
"With the increased electricity cost, the amount of unrelated charges/fees appearing in electricity bills is also increasing. Discos are raising voice against collection of taxes through bills which are resulting in poor recovery of bills," Nepra Registrar said.
Nepra says that the matter of collecting non-tariff components through electricity bills not only burdens the consumers but also affects the revenue recovery targets of disco.
The details of different taxes imposed on electricity consumers through monthly bills apart from the number of units consumed by the consumers are as follows: (i) electricity duty; (ii) GST; (iii) television licence fee; and (iv) withholding tax.
The electricity duty, which is levied on the consumers, is collected through electricity bills for the provincial governments by Wapda for the development of hydroelectric power projects in the provinces.
Virk, ex-MNA, also addressed the letter to Federal Minister for Water and Power, Federal Minister for Finance, Chairman of Nepra, Pepco MD and CEO of Gepco.