By SKM
June 30, 2025
ISLAMABAD: After the announcement by the Prime Minister to do away with the PTV fee of Rs35 from the electricity bills, the federal government has also abolished the electricity duty (ED) on bills to maximize relief to the end consumers.
According to top officials of the Power Division, Electricity Duty is a Provincial Tax levied under Section 13 of the West Pakistan Finance Act 1964 read with Article 157 (2)(b) of the constitution of the Islamic Republic of Pakistan 1973. The consumers of all categories are paying Electricity Duty which is one of the main reasons for their inflated bills. This is the electricity duty on the consumption of electricity supplied by Distribution Company.
The domestic consumers are at present paying 1.5 percent ED on their electricity bills, commercial consumers 1.5%, industrial undertakings 1%, tube wells for irrigation and agriculture machinery 1% and the premises where the supply of energy by a licensee and is unmetered 1.5% and industrial or commercial undertaking having above 500 KVA for self-use pay 3 paisas per unit of energy generated or consumed.
Federal Minister for Power Division Sardar Awais Ahmed Khan Leghari to this effect has written letters to all chief Ministers about the decision to discontinue the collection of Electricity Duty (ED) through electricity bills starting from July 2025.
In his letters, the Federal Minister sought support of all Chief Ministers in removing complexity due to arising from multiple charges, taxes, and duties being collected through consumer bills.
He said that high electricity tariffs are already a significant challenge, and the additional burden of various levies further complicates the billing structure, making it difficult for consumers to understand and manage their electricity costs.
The Federal Minister in his letters highlighted the federal government efforts regarding various measures to reduce power tariffs, including renegotiating Independent Power Producer (IPP) contracts, lowering the Return on Equity (ROE) for government-owned power plants, and implementing other structural reforms.
He said that in parallel, we are also committed to simplifying electricity bills so that they primarily reflect the actual cost of power consumption rather than serving as a collection mechanism for various additional charges.
Sardar Awais Ahmed Khan Leghari in his letter wrote that to achieve this objective, we are considering the removal of non-electricity-related charges from consumer bills.
“As part of this initiative, the Power Division has decided to discontinue the collection of Electricity Duty through electricity bills starting from July 2025. We request provincial governments to explore alternative mechanisms for collecting provincial levies and duties, rather than relying on electricity bills as a collection channel.”
He expressed the confidence that his will not only make electricity bills more transparent and easier to comprehend but also ensure that consumers are paying only for the cost of electricity, rather than a mix of other charges.
The Federal Minister also sought cooperation of all Chief Ministers in identifying and implementing alternative revenue collection methods will be instrumental in making this initiative a success. Ends
