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Sindh govt to collect two taxes through electricity bills

K-Electric will collect the Sindh government’s taxes through electricity bills. Source: APP.

KARACHI: The Sindh government on Wednesday unveiled its plan to collect two taxes on behalf of the Karachi Metropolitan Corporation (KMC) from the citizens of Karachi through the monthly electricity bill.

The plan was approved during a meeting between power utility representatives and municipal department with Chief Minister Sindh Syed Murad Ali Shah.

According to details, K-Electric will collect the Sindh government’s taxes through electricity bills after the provincial authorities could not clear dues of the power utility, removing a major obstacle in its deal with Shanghai Electric.

The meeting was convened to discuss the tax collection of the KMC and district municipal corporations through KE monthly bills. The chief minister said the move would financially strengthen local government institutions and improve local tax collection.

CM Sindh told the meeting that Rs100 and Rs200 will be charged respectively from two categories of consumers in the electricity bill. If formally signed the agreement will help the KMC collect Rs9 billion annually. The chief minister said the KMC currently collects Rs210m a year from the two taxes.

As per the plan, the power company will collect taxes through its bill sent to consumers, making it possible for the company to recover Rs2billion monthly dues from the provincial government.

The Sindh government has agreed to the mechanism and the electricity bills would include fire, and conservancy taxes collected by the Karachi Municipal Corporation (KMC).

It is being reported that said that the Sindh government owed Rs50 billion to the power utility and recoveries from the various sectors are the main obstacle in finalizing a deal with Shanghai Electric.

The meeting was informed that the chief minister will reach out to the federal government for giving the KE legal cover to collect KMC taxes through its monthly billing.

Karachi Administrator Murtaza Wahab, who was also present in the meeting, said the plan would be a revolutionary one for the KMC to make it financially viable.