ByUnderstanding utility taxes can be complex. This guide simplifies the tax structure for electricity and telephone connections in Pakistan for the 2024 tax year, empowering you to plan your bills effectively.
Electricity Consumption Taxes:
The tax rate on your electricity bill depends on your consumption and consumer category:
- Commercial & Industrial Consumers:
- No tax for bills up to Rs. 500.
- 10% tax on the amount exceeding Rs. 500 but below Rs. 20,000.
- Rs. 1950 + 12% tax on the amount exceeding Rs. 20,000 (commercial).
- Rs. 1950 + 5% tax on the amount exceeding Rs. 20,000 (industrial).
- Domestic Consumers:
- No tax for bills less than Rs. 25,000.
- 7.5% tax on the amount exceeding Rs. 25,000.
- Domestic Consumers will pay tax only if Non Filers. This tax can be saved for Domestic consumers by appearing on ATL and then updating with Electricity provider.
Advance tax shall not apply if:
- Exemption Certificate: A taxpayer can avoid advance tax by obtaining a certificate from the Commissioner of Income Tax.
- Exempt Income: The certificate confirms that the taxpayer’s income for the previous tax year was exempt from tax.
- Advance Tax Discharge: Alternatively, the certificate can verify that the taxpayer has already paid their advance tax liability for the previous year under Section 147 of the Income Tax Ordinance.
- Final or Minimum Tax Regime: Taxpayers under the final or minimum tax regime, as defined by the Ordinance, are also exempt from advance tax.
Final Tax or Adjustable Tax?
- Minimum Tax for Individuals: For individuals (non-companies), tax collected up to Rs. 360,000 per annum (Rs. 30,000 per month) is considered minimum tax. This means it cannot be refunded, even if the taxpayer’s actual tax liability is lower.
- Adjustable Tax for Individuals: For individuals, tax collected on monthly bills exceeding Rs. 30,000 can be adjusted against the final tax liability.
- Full Adjustability for Companies: Companies can fully adjust the collected tax against their overall tax liability.
Telephone & Internet Taxes:
In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs.1000, 10%on amount exceeding 1,000.
A flat 15% tax is applicable to:
- Monthly bills exceeding Rs. 1,000 for landline phones.
- The sale price of internet prepaid cards or recharge units.
- The sale of mobile phone prepaid cards or recharge units.
75% tax if persons name is in ITGO 01
Key Takeaways:
- Electricity tax rates vary based on consumption and consumer type (commercial, industrial, domestic).
- There’s no tax on domestic electricity bills below Rs. 25,000.
- Landline phone bills exceeding Rs. 1,000 and all prepaid recharge options for phones and internet are taxed at a flat 15%.
Staying Informed:
This guide provides a general overview. Consult with your utility provider or relevant tax authorities for the latest information and any regional variations.
By understanding these taxes, you can better manage your utility bills and budget for your household or business expenses.
