7.5pc tax slapped on Lesco filer consumers

Published August 12, 2021
The Lahore Electric Supply Company has started fresh cycle of billing, slapping 7.5 per cent withholding tax on customers with over Rs25,000 bill. — — Photo courtesy Wikimedia Commons/File
The Lahore Electric Supply Company has started fresh cycle of billing, slapping 7.5 per cent withholding tax on customers with over Rs25,000 bill. — — Photo courtesy Wikimedia Commons/File

LAHORE: The ‘jittery’ and ‘confused’ consumers of the Lahore Electric Supply Company (Lesco) were up in arms on Wednesday as the company started fresh cycle of billing, slapping 7.5 per cent withholding tax on customers with over Rs25,000 bill.

The situation accentuated when even (tax return) filers received bills with additional tax, which was meant for non-filers only. According to the Lesco data, it has 83,000 customers with over Rs25,000 bills in total consumer base of 5.5 million.

Admitting that even filer clients might have received July electricity bills with withholding tax, the Lesco has explanation to offer. “The company has been asking its customers to get their Computerised National Identity Cards registered with it so that their bills are excluded from the withholding tax lists. Only a few bothered. For over a year, the company had added a separate column to the electricity bills, requesting for the CNIC number. The response has been very lukewarm. In the last one month, it even ran advertisement campaign to encourage people to get themselves registered. All these efforts did not materialise fully, as the quantum of complaints now tells,” a customer services official of Lesco explains.

FBR to clear adjustment claims

The company has now started including the tax to those customers who has over Rs25,000 bills to force them to get registered with the Lesco and avoid trouble.

“The only way for the company to check whether a customer is on the active taxpayers list (ATL) is his or her CNIC number. Now, the people can get their CNIC numbers submitted quickly to avoid confusion for next month’s bill or get their bills corrected before paying. Otherwise, the company would not be able to adjust (this additional tax) it in the next month’s bill. Any tax amount, collected by the Lesco, or any other distribution company, does not belong to them, and is immediately transferred to the Federal Board of Revenue. If a customer does not have his/her bill corrected before paying, he will have to reclaim it from the FBR when filing the next return,” he says, adding the only way for customers to avoid future trouble is to get registered and get the current bill corrected before paying.

“Since this decision (of lowering slab from Rs75,000 bill to Rs25,000) was included in the Finance Bill, avoiding it now would entail criminal penalties,” says an official belonging to the finance wing of the company.

Other distribution companies had started the process in July, the Lesco began including this additional tax in August because it was left with no option. The FBR did not bother to ask whether distribution companies were prepared to collect it, whether they had registered customers or it would add to confusion.

The government decided the matter in the Finance Bill and the companies are now going to struggle with it for the next few months. However, hopefully, by next month the company would know exactly how many of these 83,000 consumers using more than Rs25,000 electricity are filers and how many are not.

Published in Dawn, August 12th, 2021

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