LAHORE: The Pakistan Federation of Chambers of Commerce and Industry (FPCCI) businessmen panel called for the burden of heavy taxes on the electricity sector to be eased as it pushed up prices electricity and added to the already high cost of commerce and industry.
FPCCI Businessmen Panel Chairman Mian Anjum Nisar in a statement released here on Saturday appreciating the government for approving continued electricity and gas subsidies for export-oriented sectors, demanded the same competitive energy tariffs for domestic industries in order to capture the global market.
He said the high cost of doing business has proven dangerous for Pakistani industry, discouraging investment in both capacity and capacity.
Due to high electricity tariffs, electricity theft became rampant because the tariff was not affordable for consumers.
He said the overpayment of the general sales tax worth Rs 85 billion went to the Federal Revenue Council, while the GST charged by independent power producers (IPP) amounted to 117 billion rupees while the GST charged to consumers amounted to 202 billion rupees. In addition to this, the government collected Rs 22 billion in taxes on fuel adjustment charges. The total amount of the fuel adjustment charge with tax was Rs 383 billion while it amounts to Rs 361 billion excluding taxes and duties from consumers. Given this heavy burden, streamlining the GST and other taxes in the electricity sector is a must to reduce the price of electricity, he suggested.
He said the recent approval of 68 billion rupees for the extension of electricity and RLNG concession tariffs was important for a sustained increase in exports, but that this benefit should also be provided to local industry to support industrial growth for which low cost inputs and raw materials are the essential basis for industrial expansion.
Mian Anjum Nisar approved the Electricity Division’s proposal to terminate and quickly buy back oil PPIs, with a production capacity of 3,300 MW and an average annual distribution factor of 5%. Their fuel cost is Rs13 per unit. However, consumers were paying Rs 60 billion per year due to the “take it or pay” capacity charge, which had an impact on the consumer tariff of Rs 0.6 per unit. Consumers will pay Rs 450 billion in total due to capacity charges over the average remaining seven years of their contracts.
BMP Chairman said that the theft of electricity from Pakistan’s power sector continues to hit the entire energy chain in the current fiscal year 2020-21, leading to the world’s worst energy crisis.
The higher rate of electricity theft is the main reason for the increase in circular debt, which has passed the 2.5 trillion rupee mark this year.
Electricity distribution companies in KP and Sindh are still bleeding from the highest rate of electricity theft. Peshawar Electric Supply Company at KP recorded 35% loss in fiscal year 2020-21. Hyderabad Electric Supply Company suffered losses of 28% and Quetta Electric Supply Company of 22%. Islamabad Electric Supply Company suffered losses of 9%. The average rate of electricity theft is 17% over the current 2020-21 fiscal year and must be controlled at all costs. He said that it is undeniable that the government has faced many economic challenges in addition to other internal and external issues and problems over the past three years.
He appreciated the government in a determined and committed manner, facing the economic challenges with firmness and boldness, taking all the difficult decisions required and successfully progressing from the recovery and stabilization of the national economy to sustainable growth.
He said it was good news that the country’s exports showed positive growth, which is a rationale for government policy to keep the cogs of the economy running during the Covid pandemic. 19.
The former FPCCI president said international and national confidence was increasing. It is a fact that the COVID-19 outbreak and the lockdown that followed have significantly damaged the global economy and Pakistan was no exception to the rule which saw negative GDP growth last year. . However, thanks to better policies adopted by the government, including relief in the mark-up rate, the economic losses have been mitigated to some extent, which must now continue to benefit more.
Mian Anjum Nisar called for the continuation and consistency of long-term policies once they are announced, as changes and revisions are detrimental to the production plan and the purchasing and reservation of industrial orders that are made. in accordance with the policy announcement.
Copyright Business Recorder, 2021