Additional 4% tax to be charged on electricity bills from Non ATL

Karachi: The Federal Board of Revenue (FBR) has commenced the collection of an extra 4% tax on electricity bills for individuals not included in the Active Taxpayers List (ATL). Reported on September 1

Sales Tax Act 2023-24

The additional 4% tax on electricity bills falls under the purview of the sales tax and is in addition to the existing 18% sales tax. The recently updated Sales Tax Act for the fiscal year 2023-24, as clarified by the FBR, defines the scope of this taxation. According to the document, a sales tax rate of 18% is now applicable to:

(a) Taxable supplies made by registered individuals as part of their taxable business operations.
(b) Imported goods into Pakistan, regardless of their intended use within the country.

Furthermore, the document specifies that when taxable supplies are made to individuals lacking registration numbers or classified as non-active taxpayers, an additional tax is imposed at a rate of 4% on the value of the supply. This is in addition to the standard sales tax rate.

Read: FPCCI ask FBR to withdrawal of Section 7E on Immovable Properties

It is crucial to note that the federal government retains the authority to specify the categories of taxable supplies exempt from this additional tax.

A notable change is the increase in the rate of the additional tax from 3% to 4%, effective as of July 1, 2023, through the Finance Act of 2023. The implementation of this higher tax rate on unregistered or inactive taxpayers has resulted in higher electricity bills for individuals who are legally obligated to obtain sales tax registration but have remained outside the tax system thus far.

Electricity Bills FAQ’s

What is a detection bill?

An assessment bill is generated and issued in cases of underbilling due to technical or administrative reasons.

All of sudden this month I have received a huge bill. What can be the reason?

There are multiple reasons of huge electricity bill like increased usage etc.

Where from I can get installments on my bill?

Distribution Companies (DISCOS) have set up Customer Care Centers at various levels, including Sub-Division, Division, Circle, and Headquarters, with the purpose of assisting consumers with installment requests, date extensions, and addressing billing-related concerns.

Where to find my concerned customer services officer?

The Customer Service Centers at the Sub-Division, Division, Circle, and Headquarters levels, along with the names and contact numbers of the respective staff, are designated according to your specific sub-division and are printed on your electricity bill.

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