• After withdrawing TV licence fees, federal govt plans to end complexities in electricity bills to provide relief to consumers
• Mayor Wahab says only City Council has authority to make decisions on municipal tax
• Opposition leader says tax should be collected by UCs and not via KE bills

KARACHI: A year after the Karachi Metropolitan Corporation (KMC) celebrated the collection of controversial Municipal Utility Charges and Tax (MUCT) through K-Electric bills, the fate of this unpopular tax now hangs in the balance as the federal government is planning to withdrawing several levies from electricity bills in order to remove “complexities” and provide relief to consumers.

As part of withdrawing levies, the federal government has already removed TV Licence Fees from electricity bills and is going to withdraw ‘electricity duty’ soon.

Federal Minister for Power Sardar Awais Ahmad Khan Leghari had recently written letters to all chief ministers about the decision to discontinue collection of Electricity Duty through electricity bills and sought their support in removing complexities arising out of multiple charges, taxes, and duties being collected through consumer bills.

He said burden of levies along with high electricity tariffs complicates the billing structure, making it difficult for consumers to understand and manage their electricity costs.

The development has triggered unease at the KMC, whose prime source of earning in the head of MUCT comes from electricity bills.

Responding to a question, Mayor Wahab said: “The KMC is collecting MUCT with the legal cover of a court verdict. If there is any new proposal from the federal government, it is ultimately the elected City Council that holds the constitutional right to decide on this matter.”

The MUCT was decided to be collected in June 2022 when the KMC and K-Electric signed an agreement to collect the municipal tax through monthly electricity bills. However, its implementation was delayed amid widespread public outcry and legal and political opposition until a court ruling in July 2024 cleared the path for its collection.

The tax applies on consumers using over 100 units.

Since then KMC officials have been describing the tax as essential to reviving municipal infrastructure.

However, the largest opposition party in the City Council, Jamaat-i-Islami, is supporting Islamabad on this tax matter and said that the collection of MUCT through KE bills is totally illegal and unconstitutional.

Advocate Saifuddin, leader of the opposition in the City Council, says that federal government “is absolutely right”. However, he didn’t directly “oppose” the tax, but strongly challenged the decision to collect it through the power utility bill, arguing that the procedure being adopted to collect the MUCT was illegal.

“We believe that this job [collection of MUCT] should be devolved to union committees and in return, you offer them reward for meeting the [MUCT collection] target or exceeding the target,” he said, adding: “This would help UCs as well to generate revenue and give them motivation to do the job with more willingness and dedication.”

Published in Dawn, August 17th, 2025