KARACHI: The K-Electric has started charging its 3.2 million consumers in its service territory a controversial tax on behalf of the Sindh government, it emerged on Thursday.

For the last one year, the Sindh government had tried to collect the Municipal Utility Charges and Taxes (MUCT) for the Karachi Metropolitan Corporation (KMC) via electricity bills of the KE, but the opposition parties, including the then ruling party at the centre, the Pakistan Tehreek-i-Insaf, had foiled the move.

The MUCT was first levied by the then City District Government Karachi during the tenure of former Karachi nazim Syed Mustafa Kamal in 2009. Currently, the KMC is itself collecting the tax but due to low recovery Sindh Chief Minister Murad Ali Shah had last year proposed that the tax be collected via KE bills.

Now, the KE has silently started charging a varying amount under the head of MUCT from the people of Karachi and many power consumers came to know about it after they got their new electricity bills this week. They were shocked to see an additional amount written as “MUCT (KMC)” in what they described as their already inflated bill.

The utility says Sindh govt directed it to charge MUCT under local govt law

“The provincial government has directed KE to collect Municipal Utility Charges & taxes (MUCT). This direction is given under Chapter-X Section 100 (1) of the Sindh Local Government Act. K-Electric as an organisation is only following relevant government instructions,” said a KE spokesperson when asked whether the utility imposed a new tax in its bills or not.

However, to a question whether the KE got permission from the National Electric Power Regulatory Authority (Nepra), the spokesperson stated that the federal and provincial government can impose taxes without Nepra’s approval.

However, when asked whether the KE would transfer the amount collected under the head of MUCT to the Sindh government or the cash-strapped KMC, the spokesperson replied: “The amount will go to KMC.”

Dawn got no response from the KE spokesperson when asked as to how the power utility would charge those consumers living in areas which did not fall within the territorial jurisdiction of the KMC like Defence Housing Authority (DHA), cantonment boards or even parts of Balochistan like Hub.

A senior KE official, requesting anonymity, said that the utility did not want to burden its consumers with an additional tax. However, it was asked by the Pakistan Muslim League-Nawaz-led federal government (of which the ruling Pakistan Peoples Party is an important partner) to collect the tax on behalf of Sindh government.

The senior official said that the issue had been pending disposal for the past one year as the Sindh government had approached Nepra last year which in turn made it clear that imposition of such charges was not in its domain and the federal or provincial governments could levy it without its permission. “The issue was so politicised that KE resisted it, but not anymore,” he said.

“People should realise that like TV licence fee and other taxes, the KE is not getting the amount of MUCT,” he said, fearing a renewed wave of protests against the KE as soon as people came to know about this.

The Karachi chief of the Jamaat-i-Islami, Hafiz Naeemur Rehman, was the first to reject the move. “KMC charges levied in K-Electric bills are not acceptable under any circumstances,” he tweeted.

Published in Dawn, September 16th, 2022