ISLAMABAD: National Electric Power Regulatory Authority (Nepra) Friday indicated that it would not allow Karachi Electric (KE) to collect Municipal Utility Charges and Tax (MUCT) from citizens on behalf of Karachi Metropolitan Corporation (KMC), as it does not fall within the purview of the executive.
Director General Nepra, Consumer Affairs Division (CAD) Naweed Illahi Shaikh testified before a panel of National Assembly that Nepra has received a letter from Sindh government regarding collection of taxes through KE but no decision has yet been taken by the regulator.
He further argued that the regulator will consult all the stakeholders prior to taking any decision in this regard.
Nepra's Legal Advisor Maria Rafique apprised the panel 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.
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"Tax can only be collected if it is part of the law as it does not fall within the purview of the executive. Nepra received a 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 to sign a formal MoU between KMC and KE.
According to Secretary Energy, KMC is suffering from financial constraint and its 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 called a meeting on September 8, 2021 in which the 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.
Engineer Sabir Hussain Qaimkhani, MQM (P), raised the issue of proposed tax collection plan of KMC through KE's billing.
He argued that the citizens of Karachi pay tax for water, law and order, education, health but drink purchased water, have their own security guards, send children to private schools and get treatment privately.
On a question of Qaimkhani if Nepra would allow KE to collect KMC charges/tax from citizens of Karachi, Director General, (CAD) Nepra said that the regulator will not take any such decision without taking stakeholders on board.
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The issue of over-billing by KE, Hesco, Sepco and Mepco also came under discussion. DG Nepra revealed that the regulator has already asked consumers to approach it in case of overbilling but no one has sent any complaint so far. Convener of meeting, Lal Chand, MNA said that consumers are fed up with Sepco's poor performance, and observed what would be the fate of general consumers when recommendations of parliamentarians are not being implemented!
Saira Banu, MNA said that appointments and postings are being "bid" in Hyderabad Electric Supply Company and those who pay higher rates, get those positions where "outside income" is higher.
The Committee also expressed its concerns at closure of public sector Generation Companies (Gencos) which were critical.
CEO, Genco Holding Muhammad Iman gave an overview of Genco's, their decommissioning, Nepra decision, rejection of review petition and filing of petition against Nepra's decision. He maintained that interests of retired employees have not been taken care of.
Copyright Business Recorder, 2021
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