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Revised Electricity Tax Rates Announced by FBR for Fiscal Year 2023-24
The Federal Board of Revenue
(FBR) has announced updated withholding tax rates for electricity consumption
effective from July 1, 2023.
These new rates have been
introduced in accordance with changes made under the Finance Act, 2023 to the
Income Tax Ordinance, 2001. FBR collects withholding income tax under Section
235 of the Income Tax Ordinance from electricity consumers.
The revised rates aim to
differentiate tax based on the amount of electricity consumed to promote energy
conservation and improve tax collection.
For commercial and industrial consumers:
- Bills up to Rs 500 will now be exempt from
withholding tax, compared to the previous rate of 10%. This is aimed at
providing relief to smaller businesses.
- Bills from Rs 500 to Rs 20,000
will continue to have 10% tax, same as the previous rate.
- Bills above Rs 20,000 will have a fixed tax
of Rs 1950 plus 12% for commercial consumers and 5% for industrial consumers.
The previous rate for bills above Rs 20,000 was 10% for both.
For domestic consumers not listed on the Active Taxpayers List:
- Bills below Rs 25,000 will now be exempt
from tax, compared to the previous rate of 10%. This aims to provide relief to
lower income households.
- Bills of Rs 25,000 or more will
have 7.5% tax. The previous rate for these households was 10%.
Consumers should review their
July electricity bills and ensure correct tax deductions as per the new rates.
Any short deduction of tax may result in penalties issued by FBR.
If consumers have any queries or
clarifications regarding the new rates, they can contact FBR directly or
consult with tax advisors to ensure compliance and avoid complications.
