Power bills: Miftah says IMF not likely to give any relief

ISLAMABAD: Former finance minister Miftah Ismail has claimed that without seeking permission from the International Monetary Fund (IMF), the incumbent government could not extend relief to masses who are feeling the heat of the inflated electricity bills.

Following mass protests against the exorbitant electricity bills across the country, the former minister said the caretaker government would seek IMF approval before providing relief to electricity consumers, who are using 200 to 300 units monthly.

On June 30, Pakistan and the IMF had reached staff-level agreement on $3 billion stand-by arrangement. Speaking in a local television show, Ismail said the caretaker government could decrease tax burden on domestic consumers who are using up to 300 electricity units. “The IMF will agree on the bills’ issue if the government talks to the fund humbly,” the minister said.

Reminding his stint, Miftah said, “When I was the finance minister, Shehbaz Sharif directed me not to increase power tariff for those using up to 200 units.” He said he had talked to the IMF about the matter and subsequently, the international lender approved the request.

In Pakistan, he said the electricity rate touched record levels and situation could be eased if the government would abolish sales tax from the electricity bills. However, he said the government had to meet the tax collection target. “If sales tax is removed from electricity bills, then where will it be collected from? If the government avoids imposing ST on property, agriculture and services sector, it will shift it to the poor, which is being done, the former minister observed.

He urged the leadership of political parties across the board to devise a strategy to collect tax from the rich, adding that taxes are not meant for just the poor. “Contracts made in 1994 and 2002 have expired, hence, new contracts should be signed to produce cheaper electricity,” the minister suggested. He also proposed privatizing of all the power distribution companies (discos) of Pakistan.

Replying a question, the minister clarified that the incumbent government was not responsible for the inflated electricity bills. He said that the consumers were paying for the power theft and rise in circular debt.